How the Rescue Plan Affects Sirius 114 comments
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Only days after an attempted financial rescue went down in flames, the Senate has passed a new bill that has some “added characteristics” designed to, in theory, help protect Main Street. The bailout plan is a polarizing issue, but there is little in the bill that really protects similar problems from happening again.
Whether you are a fan of the bailout or not, you would be best served knowing the status of it if you are invested in the markets. The issue impacts everyone, and virtually no business is insulated from it. Credit is hard to come by, and that slows down the system. People are scared, and when someone is scared a “fight or flight” instinct kicks in. In this case, fighting is nearly impossible, so everyone is taking their money and going home.
Some readers will likely express frustration that this article is not related to satellite radio. The fact of the matter is that it is indeed an integral part of why this and so many other equities have taken a beating. Sirius XM Radio (SIRI) has debt to refinance. Even though they should do it with relative ease, the fact that they are looking for a loan makes people nervous. If the company announces a resolution to the February converts, then all will be well….at least until the Fall.
About a week ago I found myself looking for a new car. I drive a lot, and my old car was at the 200,000 mile point. It was in need of a bit of work (again), and I found myself at the crossroads of putting more money into an existing car, or to trade it in and be done with it. Ultimately I decided to get new wheels. After deciding what car I wanted, and what options I wanted, I cut my best deal, and it was off to the financing department to see if they could beat the rate I had already secured. They couldn’t, so I went with my own lender, but while there I inquired about the credit crisis. The answer I got was that many people were having trouble getting their loans, and even people with “good credit” found it a challenge to get financed. That bore out when the auto sales numbers were released Wednesday. Thus, the issue is already being felt on Main Street, and the whole economy seems to be hinging on what will happen in the house.
Will the Senate passage bring the markets up Thursday? Perhaps, but it is Friday’s action that will be the determining factor. Stay tuned.
Position - Long SIRI
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This article has 114 comments:
dont jump!!!!
Just remember who put us here in November. Obama and Biden took millions for Fannie, Freddie, and other mortgage lenders for turning a blind eye towards them, selling their vote and selling us out. By the way, they are keeping the money. Barney Frank did the same and even fought to stop any oversight while the republicans, like McCain, were calling for it. Sarah Palin never took any bribe money. Then the democrats try to play us all for fools by blaming the president and his administration who have been concentrating on keeping us safe and trusting the congress to do its job on the economy.
The democrats tried to kill satrad by stalling and finally voting against the merger. If the merger had come a year earlier SIRI might also be in the black. And finally there's Nancy Pelosi, who this week took top seed for stupid bitch.
XM subscribers can add "The Best of SIRIUS" channels by calling 1-866-9SIRIXM (866-974-7496) or go to XMRadio.com for complete details. SIRIUS subscribers can add "The Best of XM" channels by calling 1-888-7BESTXM (888-723-7896), or go to SIRIUS.com for complete details.
"One of the most exciting benefits of the SIRIUS and XM merger is giving subscribers the chance to expand their subscriptions to include 'The Best of Both' services. Given the popularity of programming on both SIRIUS and XM, we expect many subscribers will upgrade their current subscriptions," said Jim Meyer, SIRIUS XM Radio President, Operations and Sales. "It's hard to imagine an XM subscriber who wouldn't be interested in adding Howard Stern and NFL games, or a SIRIUS subscriber who wouldn't want to get Oprah's channel or follow the games of the NBA and NHL, and the world's best golfers on the PGA TOUR."
A La Carte - The First Ever in Subscription Media
Today also marks the official launch of a la carte-capable radios and the unveiling of A La Carte programming packages. The first a la carte-capable radio is the SIRIUS Starmate 5 (MSRP: $129.99) now available at Best Buy, Crutchfield, RadioShack and regional retailers. Starmate 5 radios are also available at shop.sirius.com.
More information about the new programming packages and pricing for XM and SIRIUS is available online at xmradio.com and sirius.com.
I hope they put enough of these radios out there!!!
SIRI should let us all establish Sirius e-mail IDs. Then give us an e-mail marketing campaign note. Then we could send that campaign to everyone in our address books.
At least Im not a moron who waste his time trolling around discussion boards trying to beat people when they are down.
And I would say its the Republicans that have the short memory. The always seem to forget how they had control of Congress for 12 years and enacted alot of the things that ignited this mess. But I like it, because I am buying great stocks on sale, while others die a slow painful death. I would say your memory goes back about 14 months.
And like I said, this isnt a poltical forum, so I digress.
GO BIG BLUE DOG.
btw...if you missed this article on car sales from TheStreet = pretty good.
www.thestreet.com/_aol...
Merrill Lynch - Cohen
We still like the fundamentals of the underlying business and believe there is a good chance Sirius will be able to refinance.
GOLDMAN SACHS
However, the nature of our concerns has shifted toward the viability of the business model given current sub economics.
BARCLAYS
Initiated coverage on Sirius XM Radio with a buy and a $1.80 price target, which is more than double current prices.
Mel:
- Synergies
- Postive Cash Flow by next year
You wont be able to catch up once the Blue Dog starts running.
been a little while...good to see you man...
you wont read this,but here it is anyway.
more available if you like!!
The following is fact and not in dispute. Every
>>> word has been taken from company records, government agency
>>> records, court records and newspaper articles at the time.
>>>
>>>
>>>
>>> Here is a quick look into 3 former Fannie
>>> Mae executives who have brought down Wall Street.
>>>
>>>
>>>
>>> Franklin Raines was a Chairman and Chief
>>> Executive Officer at Fannie Mae. Raines was forced to
>>> retire from his position with Fannie Mae when auditing
>>> discovered severe irregulaties in Fannie Mae's
>>> accounting activities. At the time of his departure The Wall
>>> Street Journal noted, ' Raines, who long defended the
>>> company's accounting despite mounting evidence that it
>>> wasn't proper, issued a statement late Tuesday conceding
>>> that 'mistakes were made' and saying he would assume
>>> responsibility as he had earlier promised. News reports
>>> indicate the company was under growing pressure from
>>> regulators to shake up its management in the wake of
>>> findings that the company's books ran afoul of generally
>>> accepted accounting principles for four years.' Fannie
>>> Mae had to reduce its surplus by $9 billion.
>>>
>>> Raines left with a 'golden parachute
>>> valued at $240 Million in benefits. The Government filed
>>> suit against Raines when the depth of the accounting scandal
>>> became clear.
>>> housingdoom.com/2006/1.../ . The
>>> Government noted, 'The 101 charges reveal how the
>>> individuals improperly manipulated earnings to maximize
>>> their bonuses, while knowingly neglecting accounting systems
>>> and internal controls, misapplying over twenty accounting
>>> principles and misleading the regulator and the public. The
>>> Notice explains how they submitted six years of misleading
>>> and inaccurate accounting statements a nd inaccurate capital
>>> reports that enabled them to grow Fannie Mae in an unsafe
>>> and unsound manner.' These charges were made in 2006.
>>> The Court ordered Raines to return $50 Million Dollars he
>>> received in bonuses based on the miss-stated Fannie Mae
>>> profits.
>>>
>>>
>>>
>>> Tim Howard - Was the Chief Financial Officer
>>> of Fannie Mae. Howard 'was a strong internal proponent
>>> of using accounting strategies that would ensure a
>>> 'stable pattern of earnings' at Fannie. In everyday
>>> English - he was cooking the books . The Government
>>> Investigation determined that, 'Chief Financial Officer,
>>> Tim Howard, failed to provide adequate oversight to key
>>> control and reporting functions within Fannie Mae,'
>>>
>>> On June 16, 2006, Rep. Richard Baker, R-La.,
>>> asked the Justice Department to investigate his allegations
>>> that two former Fannie Mae executives lied to Congress in
>>> October 2004 when they denied manipulating the
>>> mortgage-finance giant's income statement to achieve
>>> management pay bonuses. Investigations by federal regulators
>>> and the company's board of directors since concluded
>>> that management did manipulate 1998 earn ings to trigger
>>> bonuses. Raines and Howard resigned under pressure in late
>>> 2004.
>>>
>>> Howard's Golden Parachute was estimated
>>> at $20 Million!
>>>
>>>
>>>
>>> Jim Johnson - A former executive at Lehman
>>> Brothers and who was later forced from his position as
>>> Fannie Mae CEO. A look at the Office of Federal Housing
>>> Enterprise Oversight's May 2006 report on mismanagement
>>> and corruption inside Fannie Mae, and you'll see some
>>> interesting things about Johnson. Investigators found that
>>> Fannie Mae had hidden a substantial amount of Johnson's
>>> 1998 compensation from the public, reporting that it was
>>> between $6 million and $7 million when it fact it was $21
>>> million.' Johnson is currently under investigation for
>>> taking illegal loans from Countrywide while serving as CEO
>>> of Fannie Mae.
>>>
>>> Johnson's Golden Parachute was estimated
>>> at $28 Million.
>>>
>>>
>>>
>>> WHERE ARE THEY NOW?
>>>
>>>
>>>
>>> FRANKLIN RAINES - Raines works for the Obama
>>> Campaign as Chief Economic Advisor
>>>
>>>
>>>
>>> TIM HOWARD - Howard is also a Chief Economic
>>> Advisor to Obama
>>>
>>>
>>>
>>> JIM JOHNSON - Johnson is Senior Obama Finance
>>> Advisor and was selected to run Obama's Vice
>>> Presidential Search Committee
>>>
>>>
>>>
>>>
>>>
>>> OBAMA PLANS ON CLEANING UP THE MESS -
>>>
>>> Would you trust the men who tore Wall Street
>>> down to build the New Wall Street?
>>>
>>>
>>>
'Remember The Merger'
Want to help Sirius stock short term? Vote Obama. Want to hurt your kids future? Vote Obama.
A dollar bill represents future work. Its a debt note, meaning not based on current work. It can only be used if you give it to someone who also owns debt in dollars. What happens when the world no longer owes in dollars, or doesnt need to buy oil for dollars? You guessed it, all those dollars are coming home, sending prices to the moon, gold to the moon, and the dollar index to 50. These things are unavoidable(see current FED and treasury plan(inflate the problem away!!!) Opposite of what Japan did. They went through deflation, we will experience massive inflation. And remember inflation is not rising prices, its an increase in the money supply. I know, the dollar is deflating like crazy every time a bank crashes etc.... but not really, those debts owed are still on the books. Not as much money destruction as you think there is, just more money being printed now, to cover losses until those worthless mortgages get refiananced, or turn the other direction.
All fiat currencies reduce to their true value eventually, 0.
But I would advise being out of NCC by EOD today, as I will, because the Feds take over banks on Fridays and Mondays. I highly doubt that will happen but it's just too great a risk. I'll be back in on Tuesday, or maybe day trading SIRI.
Also, watch out for a margin call on your account if you are a pattern day trader as I am. You must maintain a balance of $25K if you get in and out of the same stock twice in a 4 day period- SEC Rule.
I have said this before that the SAC is high and the major cost of the year to the company. I dont see a slow down in gross adds (in the OEMs) as such a bad thing. I beleive that is why the 3rd quarter, while the sub adds are bad the other metrics show improvement.
I have seen many say way dont I see any advertising about the merger and all the great programs coming out. I will say it again, Mel is trying to save money and what people want him to do right. Well why would you advertise about something that is not out yet and cannot get at the store yet. If cash is tight you wait till the product is out to get the most impact for each advertising dollar. While it would be nice and better to do advertising just before the product comes out, you do not get the biggest bang for each advertising dollar.
are you nut's , barney frank and other dem's are the reason for this whole finanical fiasco! loan money to people who cant afforad it, dont dare check their creidt.
the republicans warned against it.
, they were right.
your clueless!
Everything Mel has said is not set in stone... We know for a fact that Mel loves to Low Ball estimates.... I think we will get a very good picture of what the company will start to look like, on Monday.!.!.!.!.!.
You are correct. Majority of bad Q news already baked in to this price (and set-up for upside surprise). That was the Mel doing what he does best...
Don't forget MM's buy and sell as well as carry out other broker transactions. Most likely they are the shorts in cases when it doesn't make sense. They are the house yet they also play against each other...no chinese wall.
My brokerage rules are I can not short anything under $5. I don't know what others are or what the rules are for institutional...
do your incessant NCC posts make you feel good?? We get it man....you made some money. So did I yesterday on some other plays but... Q. do I come here and try to persuade people ad nauseum to buy my other stock plays?? Or brag about how much money I made?? A. No--and neither should you. No one minds a stock tip here or there but...now you're telling people when to get in and get out?? Are you really a broker...or do you work for NCC? You're a curious dude.
I sold almost all my SIRI at .72, doubled that amount with other funds and put it in NCC at 1.50, sold NCC at 3.04. That's the equivalent of SIRI going to 1.46. Since I doubled it, I have covered all my SIRI losses in 4 days. The market lost over 700 points during that time, and SIRI went from . 72 to .60, down 16.6%.
Now do you understand?
Please don't make that NCC accusation again.
You know it's bullshuvic and it's beneath you.
I'll let you know my next move.
From what I've seen today, no way will they even vote this time unless they know for sure they have enough aye's. So if you see a vote tomorrow, it should mean pass. That was the mistake they made last time. Personally, I can't see it not passing since these politicians have to get back to the election, there's only 4 weeks left. So they certainly won't be spending another week screwing with this thing. By delaying into this week, they all got what they wanted: to plug this bill with hard to pass otherwise pork. What a lucky opportunity!!! It was like a gift from Santa for all of them. Think: driving a long with your moon roof open and suddenly a bag of money drops in on the seat beside you kind of lucky. There's now crap in this bill that never could have been passed, period. In the meantime, as always, we're the losers while the powers play their games. INMVHO...
Again...listen I don't know you from adam. You might be an alright dude. But why are insisting on being so irritating? There are a lot of cool people here who voice their opinions on SIRI and sometimes about related topics on gov, politics, etc... But I've never seen anything like you. Why is it your job to run peoples portfolios? WE GET IT MAN. We get your interest in NCC and how you sold your SIRI to make up your losses--NO MATH REQUIRED!! I got that from your first post!! Which I thought was a fine post--you did your thing. But from there, it's day in day out, beat people over the head of: the price of NCC, where NCC is going, how great of a stock NCC is, why everyone should dump their SIRI RIGHT NOW and pile into the risky NCC (whos common could be obliterated any day just like Wamu or any of the others), where everyone should buy in on NCC, where they should dump NCC, I'm mean muley, WTF??? Does it sink in that by now everyone here has read your FIRST POST and if they wanted to make a move on NCC, they would. Believe it man!!! It's all true. Thank you.
their are a lot of people who read these post's who have been hurt bad by this stock.
muely's right and just makeing some suggestions, so what!
there are some good day trades like NCC out there iv'e been hitting also, helps ease the pain of this one.
siri long and adding..attitude..pati...
lighten up on muley.
whats so bad about that.
Don't forget I am in the same group you describe as hurting from being down so much on SIRI, and I commiserate with all others. And everyone's got their own strategy to deal with it--I recognized muley for his but do I have to hear about it every day several times a day? As said, I have nothing against him but it feels a little excessive when someone says the same thing day in day out about another stock play, blow by blow--and also rip SIRI for not going anywhere in 6 months? Hey if that's your trusted advisor more power to you--we'll see who's right. And isn't it enough to post some info to help people in another stock play once?? I thought this was a blog about SIRI, maybe I'm wrong...but I wonder if people would like it if I started raving about a pharma stock play non stop here? People know I've suggested another stock here before (to help also) but after that, isn't it just up to anyone reading to decide if they want to check it out rather than having it rammed down their throat daily? Hey, if you guys like that, I'll just use an iggy and let it roll...
Nothing wrong with making those numbers but...
A. I rarely dump for a loss and stock hop--that's a perscription for disaster. If you got away with it this time, you're lucky. If you know trading, you know that's a risky proposition and could lead to compounded heavy losses.
B. The reason is for A. is I have a strategy and time. SIRI is not my only investment. I also don't invest my rent money so I can afford to wait. When I know I'm waiting for my day, and it is on my timeline horizon, I stick. When it's time to take my profit, I do. That's actually called solid investing. Maybe muley can't afford to be down on paper, I can. I'm no millionaire but I understand how to invest and do pretty well. Trust me, muley's move was risky. He took a big risk and as said, this time he got away with it--which I'm glad for him. But anyone here reading his strategy should not think that's how Wall Street works most of the time. If you do, you will be hurt bad. Just try it a couple of times and see what happens! Holdon, if you play the market like that, we have little in common, all do respect.
That is my point. I have also been hurt bad by this stock and by all the folks out their, especially analysts, pulling what's going to happen to this company out of their a$$. Muley101, Stan wrote articles on the stock premerger and has posted here with good ideas regarding opportunities for this company. He has obviously changed his view and now comes here and tells people, as noted by sl62, to sell their positions in Siri to invest in NCC. Although he is entitled to his opinions and He Happened To BE RIGHT for now on NCC, that doesn't mean it would have always been a smart move. If he had been wrong..... what would you say to that. I have taken a lot of abuse for my comments about Sirius and its future potential by those who got out, were never in, or are just shorting the stock. I have a lot of skin in this game and get annoyed by those who have no invested interest.
My comment about him sounding like and ex-smoker came after I read his comments on the next article regarding Best Of by Tyler. It didn't sound to me like he was just wanting to: Help people out with his knowledge of trading, but rather, a little in your face for being with Sirius stock. Between his telling folks to sell at these levels, by a risky Mortgage Company like NCC, and then go further in bashing Sirius is a little over the top. If he had not been a premerger supporter and author of articles here, I would of probably ignored his comments. I am glad it is working for him with NCC..... but So What!!
Sorry for all the postings on NCC. The play was somewhat risky but not that risky since Oppenheimer upgraded it and so many analysts said buy it, plus even it critics said it was well capitalized, and it was at less than 10% of its 5 year high. I knew that when the Senate decided to vote on the bailout bioll that they knew they already had an overwhelming majority to pass it and send a message to the House. That had to make NCC pop. I felt that since I was recommending it as a way out to you I should keep you informed of the opportunity as I was playing it, and when to get out.
The times ahead are going to be real tough for the economy and the bear market should continue, whoever gets elected, for at least a couple of years since we have so many problems in housing. Everyone is blaming the banks and they do share the blame for some predatory lending. But the real root of the problem is the socialist movement in this country that makes it politically incorrect to go against income redistribution legislation. Socialism, and capitalism do not mix well, especially when seasoned with incompetence and corruption which socialism breeds.
I still own some SIRI but I doubt I will own it long. I will sell on any decent uptrend.
i clicked his name and found a lot of posts i missed, but i still say so what.
i have'nt sold any share's of siri to play these risky day trades, i've only added to my position of siri on dips .
alot of you are frusterated on the silence of mel, with a market in this condition, silence is the best thing , you don't realease good news during bad conditions. the market will change, the news will come, the rocket will fire.
however the real money is in the lonnnng run!
i was gonna conclude with "good luck all" but realized that only pertains to stocks like NCC. so i'll bow out saying saying,
stay patintence, the cooler heads will prevail!
rule of spec. stocks (not day trades) , you ride it out all the way.
Again your knowledge and insight are appreciated by most everyone on this blog!!!!!
I would like to cont to ave down from 1.73. When would you look to pull the trigger and sell 20%. I'm looking at the mid to upper .90's due to the resistance that would want to keep Siri under $1. And then buy back in on mod to major dip. Am I crazy or is this plausible. Or should I lower my sell target??
Killer
Love your daily rants....Keep the faith!!!
You should have been the above post! Blog dropped it!
Sorry
LoL
Yep , lots of people were fooled by the immediate effect of the bailout bill being passed on the banks. Luckily I had a 2% stop on the trade. But look at the charts, XLF will be back above 22 within a week or two.
It came back 1.75 in the last 2 hours. There is a tremendous amount of support there.
I told you SIRI would go to .50. It actually hit .45 today. I didnt expect it to happen so fast.
If that is the case, is there a chance SIRI will get delisted, and if so, what happens then?