Paying Sirius Consideration

I decided to buy more shares of Sirius XM (SIRI) Monday. Am I concerned about the long-term debt of the company? Of course I am. I had reduced my position considerably, and have given it a lot of thought.

As a person who dedicates most of his free time to following Sirius, the news of satellite radio is my business. One story in particular has been released and re-released for the last several days by several different media outlets. I’m referring to the news story of Howard Stern and the attack on his reach.

I had to ask myself what would qualify this as news. I have studied the way the media has attacked Sirius XM in the past, and I believe the answer is in the new “best of” programming packages. Being a Sirius subscriber myself, I often hear various commercials on Sirius promoting the XM package. It dawned on me that existing XM subscribers are also being offered the Sirius package, which of course means Howard Stern!

There are 10 million XM subscribers out there already. If only 10% sign up, that’s a million more Stern listeners. That means more revenue from more advertisers and a return of the King Of All Media. Terrestrial media will want to stand in the way of Howard regaining his top spot! Hence the barrage of negative press targeting Howard. I am expecting a big fourth quarter Howard Stern push. My money’s on Howard!

Having said that, I feel there is a still better reason to own the stock right now. My initial thinking was that Sirius XM was bound to report a less-than stellar quarter, to say the least. Let’s face it; auto sales are down and the credit markets are not being very helpful.

Yet one truth remains. Most of Sirius XM’s subscribers are on longer term prepaid plans. Long enough that is, to get through a short term recession with hardly a blip to their balance sheet. Most are not monthly subscribers. They are annual, semi annual and quarterly. So my thinking is that Q3 may not be as bad as some have projected. Looking forward, the fourth quarter with the new plans, services and radios looks good also. The new navigation systems will likely provide still another cushion on the revenue side, reducing further the effects of slowing auto sales.

Position: Long SIRI

Comments

[SIRI, go up!:]

I trust you all the time!

2008 Oct 14 03:39 PM

[Mark Montgo...:]

Howard Stern has MILLIONS of fanatical fans and the idea that his influence might be on the wane is ludicrous and laughable.The guy that wrote that disparaging report is obviosly in terrestial radio's pocket.

2008 Oct 14 04:18 PM

[FlightBenefits:]

At this bargain basement price any Sirius-XM fan/subscriber would be ludicrous not to buy thousands of shares. I have 3 subscriptions, and as the shares go up from here the stock pays my subscription fees. Wow, there really is such a thing as a free luch!

2008 Oct 14 04:26 PM

[FlightBenefits:]

obviously i meant lunch, luch is never free :)

2008 Oct 14 04:27 PM

[Sirius XM guy:]

Like I said before, it is not about how many listeners, or market position, that will take care for itself. It is about 3 things-Content, Content, and Content.
Terrestrial radio is unlistenable. I got a used car without satellite and I was miserable listening to TR-it really sucks. I could not wait to get my SR. You get sick of music; you need a change of pace, switch to a choice of a hundred other programs. Feel like comedy, not a problem. Let’s see terrestrial radio do that. Any bad press is definitely sponsored by the very scared TR interest groups. SR really speaks for itself. Share holder or not, I hope they will never go away, I do not know what I would do without SR.

2008 Oct 14 04:41 PM

[KangarooLip...:]

BabaBooey!! BabaBooey!!

2008 Oct 14 04:59 PM

[User 252443:]

If sirius really wanted to, they could come up with 300 mil, offer a 3yr package for $300 prepaid, if 1 million subs take the offer, 300 million bucks, come on, it's just not that difficult. Will it cost them anything, I don't know, as far as I know they have fixed costs. do a 5 yr plan for $400, this gets you through the next year, hopefully the economy recovers and they can add a lot more subs, secure financing, but untill than, they need to raise cash on their own, and these are just a couple of ideas. In my opinion, they're asleep at the wheel, I'm a sub and a shareholder and I'm not pleased with what I'm hearing,(nothing). They're waiting for the holiday season? Who knows how that's going to turn out..... WAKE UP SIRIUS

2008 Oct 14 06:35 PM

[mannhimself:]

I have never listen to howard before April 2007 (even on terrestrial radio-wasn't on in my area). Ever since May 2007 (my first sirius radio-no good terrestrial rock FM stations) I've listen to howard in the mornings and octane 20 in the afternoons and Scott Rerrall at nights. And ever since June 2007 I vowed NEVER to listen to terrestrial radio anymore. Any one that bad mouths satellite radio is brainwashed by the NAB.

2008 Oct 14 09:24 PM

[Mailmaan:]

I have 3 Sirius Radio's and when I bought my GM Car I had XM with it. This didn't bother me all that much because I also faith that they would merge and that I could hear my shows that were on Sirius on XM. Well now I find out even though I am paying for 3 radios in sirius To get stations that I am already paying for, I have to pay again. I paid a year in advance for the xm, I don't want wires or replaceing the radio in the Caddy, So now when the time comes I will have to drop 3 radio's in Sirius and have only 1 xm/sirius in the car. One step forward two steps back. I also own sirius stock and from my point I am not seeing a gain.

2008 Oct 15 10:32 AM

[SIRI, go up!:]

Sirius XM (SIRI) has laid off about 80 former XM employees based in the former XM headquarters in Washington, D.C., according to the Washington Post.

The Post says that the cuts included “many of the on-air voices and program directors of the service’s most popular music channels,” including the staff of its Decades channels - hits of the 40s, 50s, 60s, etc. - and its black music channels.

2008 Oct 15 09:39 PM

[jswede:]

terrestrial radio is not your competition... it's the 60,000+ and growing internet radio stations that you should worry about. (Most of them commercial free, btw)

no reason an IR can't outbid a debt-laden SiriXM for Stern's next contract. You'll be able to get IR without trying anywhere you want within a few years. You can already get it now anywhere yoiu want, with just a little effort.

2008 Oct 16 10:14 AM

[neddie:]

do you plan to sell at 5 cents or what

2008 Oct 16 11:43 AM

[relmor:]

I wont sell at anything but.00 cents. Otherwise Im holding it. Now, Mr. Neddie, come back 4-5 months from now, and well talk about the company. Because until then both sides can offer nothing but opinion and congecture(well, I use facts but dont let that distract you).

2008 Oct 16 07:24 PM