Liberty Media Is Sirius About Time Warner [View article]
Jack10000-
"It seems to be common theme among some SA writers. "
Just as long as we're clear that I am the outcast with the uncommon theme... LOL!
Spencer- I enjoyed the speculation, but I am firmly in the camp that does not see adding another $1-$2 billion in debt as a positive, nor do I see Liberty's participation as driving up the price.
It seems to me that when Sirius revealed that Liberty participation was no longer necessary, SIRI began to move up. Coincidence? Could be, since earnings were also released at the same time. It's also possible that folks realized that if Liberty wasn't participating, share purchases by Sirius would have more impact - to put it simply, the law of supply (where non-Liberty owned SIRI shares would constitute limited supply) and demand applies.
Is Pirate Brands A Game Changer For B&G? [View article]
JM20-
"Do you think Wenner could sell off some of the BGS Tier 3 "low/slow growth" brands....."
I suppose he "could", but why would he? BGS has apparently had little problem raising capital for acquisitions, whether it is from debt or new equity, so what would be the motivation? The brands are essentially in "caretaker" mode with no new investment likely. And, because production is farmed out to co-packers, as long as they continue to contribute to the bottom line, I fail to see the benefit.
Often, what happens when companies discontinue or sell off "poor" performers, the overhead that was allocated to these brands (SG&A, including fixed overhead from facilities or IT services) now ends up being allocated to the better brands, in turn, reducing their profitability.
So, as long as EBITDA is positive, I'm not sure I would see that as welcome news.
Is Apple The Reason The Price Of Sirius Dropped? [View article]
wwtimewarp-
"Carve out a music-only package that allows you to choose your own music on-demand from a massive library and charge $10 per mo. "
I don't see how this is a realistic path for Sirius. The combination of limited bandwidth, diverse h/w platforms and one way communication makes on-demand problematic with the satellites. MySXM only works over the Internet, and as soon as Sirius moves to that model, the Internet royalty rates apply and you pick up all the disadvantages of non-satellite delivery. .
" Buy out Howard Stern? Even Apple cant afford to do that long term without charging customers."
Howard has another 2.5 years to go. And, if Apple thinks they can sell more iPhones or sell enough mobile ads, or sell more music, or... well, it may not be necessary to charge customers.
This one states the following (as of the March quarter): "As Apple's line of iPhones only run iOS, the mobile operating system also enjoyed a 2.7 bump and was the only OS to see growth in the March quarter. Google's Android platform was still on over half of all UY.S. smartphones, but its share dipped 1.4 percent over the three month period, going from 53.4 percent to 52 percent.
Number three BlackBerry shed 1.2 percent to move from 6.4 percent to 5.2 percent, while Microsoft's Windows Phone put up slight growth of 0.1 percent to end the quarter with 3 percent of the market. Symbian rounded out the top five and dropped its marketshare from 0.6 percent to 0.5 percent."
I've also noted elsewhere that I suspect that all Android phones are not the exact same OS, but I could be in error on that assumption. H/W manufacturers tend to tweak things if they are allowed to do so.
Is Pirate Brands A Game Changer For B&G? [View article]
JM20-
"I don't think we, at the present can really say, with accuracy, what the EBITA margin for Piates Booty will be under BGS control. But time will tell."
You and I may not be able to, but Wenner's prediction for 2014 is 22%. ;-)
"a "snack EBITA margin" might be an important metric to keep in mind"
I agree, and I certainly expect it will be assessed internally. I just can't see BGS disclosing those details since it would be revealing too much information to the competition. (I'm also not smart enough to figure it out either - or maybe just too lazy to even give it a shot.) Anyway, I never really understood the inane focus on EBITDA. It's useful when BGS gives us info and we can make comparisons, but the expected FCF number is more interesting. The problem for me is that Interest and Taxes are very important when measuring an investment potential.
I do think BGS earnings will continue to grow and the company will further increase the dividend, I just think that the P/E multiple is getting a bit stretched.
"and throws egg all over my face and my "worry-wort" outlook ..... !"
Is Apple The Reason The Price Of Sirius Dropped? [View article]
heady-
"Don't bother to tell me about the deactivation rate because we have discussed this ad nauseum and it is a function of the business model."
You can't unilaterally decide the comments I am permitted to make, and if it makes you feel better, I assure you it is no bother at all. The facts are that deactivations far exceeds the number of net new subs. Just because Sirius operates with a business model that is based on only requiring a minority of folks receiving a free trial being willing to become self-pay subscribers, that does not alter the fact that a majority, or most people, are not willing to pay. (Or that a significant portion of those that are willing to pay, will do so only if offered a discount.)
Sirius will throw out a net of more than 10 million new vehicle trials this year. From that wide net, it expects to add less than 1.4 million subs, and 1.6 million self pay subs. And, the 1.4 and 1.6 million occur only because there are another 1.5 million subs coming from reactivations from used cars. You can choose to ignore deactivations, but do not expect me to ignore the fact that there are expected to be more than 8 million in 2013.
"As long as the net new subs outpace the deactivations, the MAJORIITY is paying!"
I will assume that "MAJORIITY" has the same meaning as "MAJORITY". If so, you and I both know that this is a denial of the arithmetic and the English language. From the Merriam-Webster Dictionary:
"Definition of MOST
1 : greatest in quantity, extent, or degree <the most ability> 2 : the majority of <most people> ... See most defined for English-language learners » 1 : almost all : the majority of — usually used before a plural noun ▪ Most people believe this. ▪ Most eligible voters went to the polls. ▪ I'm afraid of most dogs, but not this one. ▪ I like most foods. 2 : greatest in amount or degree ▪ Choosing a color took the most time. ▪ That family owned the most land. ▪ Unfortunately the negative aspects of our schools get the most attention. "
When 55% of new car buyers elect not to pay after their trial, that is "most" as in "the majority of <most people>".
When Sirius decides not to put radios in one third of all new cars, it's because the conversion rate is even less than the 45%. When used car trials result in conversion rates in the mid to high 30% range, that's more than 60% of the used car buyers that get a trial that won't pay for radio. When more than 20% of self pay subscribers (that's from the minority of those that were once willing to pay) decide to cancel each year, that drives the number of those that decided not to pay even higher.
You can make up your own language or you can make up your own mathematical model, but the fact is that if we use accepted mathematical concepts and accepted English language constructs, most people, or as you wrote, "the MAJORIITY", won't pay for radio.
The idea that because the number of net new subs is outpacing deactivations supports a contention that the majority is paying does not hold up either. All that indicates that the number of those willing to pay is growing. It ignores the fact that those unwilling to pay is growing more quickly. Why do you think that the used car opportunity is growing? It is growing because the the number of folks deciding not to pay is growing so quickly.
Sirius expects the number of vehicles equipped with OEM-installed satellite radios on the road to pass 100 million within the next 5 years. Are you suggesting that Sirius will have more than 50 million self-pay subscribers? Even the overly optimistic sirifiar has no such delusions. And those are only the vehicles with OEM installed radios. It ignores whatever marginal numbers came from retail radios or smartphone apps or other Internet subs.
I will repeat, most folks are unwilling to pay for radio. I will also go out on a limb here and have the temerity to make the generalization that most folks are willing to pay for TV and most folks are willing to pay for cellular service. Most folks will also pay for necessities like food, clothing, housing and utilities. Radio just happens to be one of those things that most folks won't pay for.
Is Apple The Reason The Price Of Sirius Dropped? [View article]
letitbegood-
"Sirius, on the other hand, is less proprietary"
Thanks for the thoughts, but how is Sirius "less proprietary"? I wasn't aware that they had any interface specifications published. I haven't investigated the Apple or Google situation or whether or not there are developer tool-kits, but I suspect that there are since lots of third party apps for both iOS and Android are out there.
Apple is, I would guess, much more controlled than Android. I thinking this is the case because Android is being ported to so many hardware platforms. Based on what I know about open source on H/W platforms, it can be difficult to control what happens in the end product. Sometimes the H/W folks like to write directly to the H/W for improved performance rather than use S/W interfaces. When that happens, certain pieces of code can get changed, undocumented interfaces tend to crop up and things "break."
(BTW, besides Apple and Google, let's not forget the other company out there with tens of billions of dollars of cash - Microsoft.)
Is Pirate Brands A Game Changer For B&G? [View article]
JM20-
"I sure hope Wenner knows what he is doing with his new snack brands and all their associated hardware........looks like BGS investors are entering a "new day" in the BGS saga."
I also hope it's the right move, the growth continues and there are no hiccups. The big plus in Q2 was extending the maturities at nice interest rates. Now, we just have to see if the snack foods are at some sort of critical mass that results in increased earnings. The market sure seems to buy into the story as the price continued to rise for the week. I want to again listen to the analyst presentation Wenner made at the Piper Jaffray Consumer Conference on 06/12.
BTW, while the Pirate acquisition price paid to EBITDA ratio was similar to CSB, I seem to recall the EBITDA margin for CSB was much higher.
Is Apple The Reason The Price Of Sirius Dropped? [View article]
JamesRobertDobbs-
Apparently you don't want to pay for any cellular plan. Most folks have cell plans ( http://bit.ly/13IYTGx ):
As of May 2013:
91% of American adults have a cell phone 56% of American adults have a smartphone 28% of cell owners own an Android; 25% own an iPhone; 4% own a Blackberry 34% of American adults own a tablet computer
Is Apple The Reason The Price Of Sirius Dropped? [View article]
JamesRobertDobbs-
"You left out pre-owned vehicles with Sirius."
Because the data is even worse. The conversion rate on used vehicles is substantially below new vehicles. The only data point that the company gave investors and analysts about used cars was when they gave out data based on the CPO program - and those are the top of the line used cars. "It's not as high as new cars. It's, in fact, it tracks in the mid- to high 30s right now. " (Read http://seekingalpha.co... ). Since that figure has never been updated, I would make the assumption that it's not all that great. Also, consider that total reactivations of used cars is only expected to be 1.5 million vehicles this year (vs. more than a million last year). That accounts for almost the entire self-pay net add figure for 2013.
And, yes, the stats have held relatively constant, but that's despite an improving economy. The reasons we saw a growth in subs had largely been due to an increasing penetration rate in new cars and an increase in new vehicle sales. Unless the new vehicle penetration increases (not expected to occur) or new vehicle sales continue making substantial gains, the growth from that segment is over. Now it's up to the used cars. And, I'm expecting those performance characteristics to be worse than new cars.
Is Apple The Reason The Price Of Sirius Dropped? [View article]
JamesRobertDobbs-
"I don't have a cell plan. It's too expensive. A lot of people don't."
A lot more folks don't have Sirius than don't have cell plans. You seem to be in the minority of those choosing to forego cell phones and in the minority of folks choosing to subscribe to Sirius.
Is Apple The Reason The Price Of Sirius Dropped? [View article]
JamesRobertDobbs-
"Not really. $14/mo ($8 for a la carte)."
First, it's $14.49 per month plus $1.81 MRF plus fees and taxes. And, very few folks take the a la carte plan. And, whether you or I think it's a lot of money or a little bit of money, MOST folks won't open their wallets to pay for it. The conversion rate of less than 50% and the cancellation rate of more than 20% per year bear this out.
"And you didn't address the spotty nature of Internet over cell phone."
True, and it's a reason that many folks DO subscribe and is a reason that there are satellite radio devotees. As I stated, Sirius satisfies and provides value to a niche market, and it is a sizable niche market. However, I also see growth as limited and many of the Wall Street analyst price projections as unwarranted.
Is Apple The Reason The Price Of Sirius Dropped? [View article]
fauxscot-
"I see no catalyst for growth in the S/XM tech. "
Thanks for the ("rambling") comment. I tend to agree, except that I see some limited amount of growth ahead for Sirius, just not enough to justify the current multiple. That doesn't mean that EPS doesn't continue to grow for a while as debt gets eliminated and other pre-merger contracts get renegotiated and future price increases take place.
And even when saturation gets close, as with cable TV, there will be significant cash generated that will need to be returned to shareholders.
While cellular tech and coverage continues to improve and grow, it will be a long time, if ever, before it represents a true threat to a significant portion of Sirius's core listening base.
Liberty Media Is Sirius About Time Warner [View article]
"It seems to be common theme among some SA writers. "
Just as long as we're clear that I am the outcast with the uncommon theme... LOL!
Spencer- I enjoyed the speculation, but I am firmly in the camp that does not see adding another $1-$2 billion in debt as a positive, nor do I see Liberty's participation as driving up the price.
It seems to me that when Sirius revealed that Liberty participation was no longer necessary, SIRI began to move up. Coincidence? Could be, since earnings were also released at the same time. It's also possible that folks realized that if Liberty wasn't participating, share purchases by Sirius would have more impact - to put it simply, the law of supply (where non-Liberty owned SIRI shares would constitute limited supply) and demand applies.
Is Pirate Brands A Game Changer For B&G? [View article]
"Do you think Wenner could sell off some of the BGS Tier 3 "low/slow growth" brands....."
I suppose he "could", but why would he? BGS has apparently had little problem raising capital for acquisitions, whether it is from debt or new equity, so what would be the motivation? The brands are essentially in "caretaker" mode with no new investment likely. And, because production is farmed out to co-packers, as long as they continue to contribute to the bottom line, I fail to see the benefit.
Often, what happens when companies discontinue or sell off "poor" performers, the overhead that was allocated to these brands (SG&A, including fixed overhead from facilities or IT services) now ends up being allocated to the better brands, in turn, reducing their profitability.
So, as long as EBITDA is positive, I'm not sure I would see that as welcome news.
Is Apple The Reason The Price Of Sirius Dropped? [View article]
"Carve out a music-only package that allows you to choose your own music on-demand from a massive library and charge $10 per mo. "
I don't see how this is a realistic path for Sirius. The combination of limited bandwidth, diverse h/w platforms and one way communication makes on-demand problematic with the satellites. MySXM only works over the Internet, and as soon as Sirius moves to that model, the Internet royalty rates apply and you pick up all the disadvantages of non-satellite delivery. .
Is Sirius XM's Buyback 'Terrible?' [View article]
" Buy out Howard Stern? Even Apple cant afford to do that long term without charging customers."
Howard has another 2.5 years to go. And, if Apple thinks they can sell more iPhones or sell enough mobile ads, or sell more music, or... well, it may not be necessary to charge customers.
Is Sirius XM's Buyback 'Terrible?' [View article]
Not to beat a dead horse, but here's another link... http://bit.ly/17QtUMS
This one states the following (as of the March quarter):
"As Apple's line of iPhones only run iOS, the mobile operating system also enjoyed a 2.7 bump and was the only OS to see growth in the March quarter. Google's Android platform was still on over half of all UY.S. smartphones, but its share dipped 1.4 percent over the three month period, going from 53.4 percent to 52 percent.
Number three BlackBerry shed 1.2 percent to move from 6.4 percent to 5.2 percent, while Microsoft's Windows Phone put up slight growth of 0.1 percent to end the quarter with 3 percent of the market. Symbian rounded out the top five and dropped its marketshare from 0.6 percent to 0.5 percent."
I've also noted elsewhere that I suspect that all Android phones are not the exact same OS, but I could be in error on that assumption. H/W manufacturers tend to tweak things if they are allowed to do so.
Is Pirate Brands A Game Changer For B&G? [View article]
"I don't think we, at the present can really say, with accuracy,
what the EBITA margin for Piates Booty will be under BGS
control. But time will tell."
You and I may not be able to, but Wenner's prediction for 2014 is 22%. ;-)
"a "snack EBITA margin" might be an important metric to keep in mind"
I agree, and I certainly expect it will be assessed internally. I just can't see BGS disclosing those details since it would be revealing too much information to the competition. (I'm also not smart enough to figure it out either - or maybe just too lazy to even give it a shot.) Anyway, I never really understood the inane focus on EBITDA. It's useful when BGS gives us info and we can make comparisons, but the expected FCF number is more interesting. The problem for me is that Interest and Taxes are very important when measuring an investment potential.
I do think BGS earnings will continue to grow and the company will further increase the dividend, I just think that the P/E multiple is getting a bit stretched.
"and throws egg all over my face and my "worry-wort" outlook ..... !"
If he does, I'm sure to be hit by the ricochet.
Is Apple The Reason The Price Of Sirius Dropped? [View article]
"Don't bother to tell me about the deactivation rate because we have discussed this ad nauseum and it is a function of the business model."
You can't unilaterally decide the comments I am permitted to make, and if it makes you feel better, I assure you it is no bother at all. The facts are that deactivations far exceeds the number of net new subs. Just because Sirius operates with a business model that is based on only requiring a minority of folks receiving a free trial being willing to become self-pay subscribers, that does not alter the fact that a majority, or most people, are not willing to pay. (Or that a significant portion of those that are willing to pay, will do so only if offered a discount.)
Sirius will throw out a net of more than 10 million new vehicle trials this year. From that wide net, it expects to add less than 1.4 million subs, and 1.6 million self pay subs. And, the 1.4 and 1.6 million occur only because there are another 1.5 million subs coming from reactivations from used cars. You can choose to ignore deactivations, but do not expect me to ignore the fact that there are expected to be more than 8 million in 2013.
"As long as the net new subs outpace the deactivations, the MAJORIITY is paying!"
I will assume that "MAJORIITY" has the same meaning as "MAJORITY". If so, you and I both know that this is a denial of the arithmetic and the English language. From the Merriam-Webster Dictionary:
"Definition of MOST
1 : greatest in quantity, extent, or degree <the most ability>
2 : the majority of <most people>
... See most defined for English-language learners »
1 : almost all : the majority of — usually used before a plural noun ▪ Most people believe this. ▪ Most eligible voters went to the polls. ▪ I'm afraid of most dogs, but not this one. ▪ I like most foods.
2 : greatest in amount or degree
▪ Choosing a color took the most time. ▪ That family owned the most land. ▪ Unfortunately the negative aspects of our schools get the most attention. "
When 55% of new car buyers elect not to pay after their trial, that is "most" as in "the majority of <most people>".
When Sirius decides not to put radios in one third of all new cars, it's because the conversion rate is even less than the 45%. When used car trials result in conversion rates in the mid to high 30% range, that's more than 60% of the used car buyers that get a trial that won't pay for radio. When more than 20% of self pay subscribers (that's from the minority of those that were once willing to pay) decide to cancel each year, that drives the number of those that decided not to pay even higher.
You can make up your own language or you can make up your own mathematical model, but the fact is that if we use accepted mathematical concepts and accepted English language constructs, most people, or as you wrote, "the MAJORIITY", won't pay for radio.
The idea that because the number of net new subs is outpacing deactivations supports a contention that the majority is paying does not hold up either. All that indicates that the number of those willing to pay is growing. It ignores the fact that those unwilling to pay is growing more quickly. Why do you think that the used car opportunity is growing? It is growing because the the number of folks deciding not to pay is growing so quickly.
Sirius expects the number of vehicles equipped with OEM-installed satellite radios on the road to pass 100 million within the next 5 years. Are you suggesting that Sirius will have more than 50 million self-pay subscribers? Even the overly optimistic sirifiar has no such delusions. And those are only the vehicles with OEM installed radios. It ignores whatever marginal numbers came from retail radios or smartphone apps or other Internet subs.
I will repeat, most folks are unwilling to pay for radio. I will also go out on a limb here and have the temerity to make the generalization that most folks are willing to pay for TV and most folks are willing to pay for cellular service. Most folks will also pay for necessities like food, clothing, housing and utilities. Radio just happens to be one of those things that most folks won't pay for.
Is Apple The Reason The Price Of Sirius Dropped? [View article]
"Sirius, on the other hand, is less proprietary"
Thanks for the thoughts, but how is Sirius "less proprietary"? I wasn't aware that they had any interface specifications published. I haven't investigated the Apple or Google situation or whether or not there are developer tool-kits, but I suspect that there are since lots of third party apps for both iOS and Android are out there.
Apple is, I would guess, much more controlled than Android. I thinking this is the case because Android is being ported to so many hardware platforms. Based on what I know about open source on H/W platforms, it can be difficult to control what happens in the end product. Sometimes the H/W folks like to write directly to the H/W for improved performance rather than use S/W interfaces. When that happens, certain pieces of code can get changed, undocumented interfaces tend to crop up and things "break."
(BTW, besides Apple and Google, let's not forget the other company out there with tens of billions of dollars of cash - Microsoft.)
Is Pirate Brands A Game Changer For B&G? [View article]
"I sure hope Wenner knows what he is doing with his new
snack brands and all their associated hardware........looks
like BGS investors are entering a "new day" in the BGS
saga."
I also hope it's the right move, the growth continues and there are no hiccups. The big plus in Q2 was extending the maturities at nice interest rates. Now, we just have to see if the snack foods are at some sort of critical mass that results in increased earnings. The market sure seems to buy into the story as the price continued to rise for the week. I want to again listen to the analyst presentation Wenner made at the Piper Jaffray Consumer Conference on 06/12.
BTW, while the Pirate acquisition price paid to EBITDA ratio was similar to CSB, I seem to recall the EBITDA margin for CSB was much higher.
Is Apple The Reason The Price Of Sirius Dropped? [View article]
Apparently you don't want to pay for any cellular plan. Most folks have cell plans ( http://bit.ly/13IYTGx ):
As of May 2013:
91% of American adults have a cell phone
56% of American adults have a smartphone
28% of cell owners own an Android; 25% own an iPhone; 4% own a Blackberry
34% of American adults own a tablet computer
Is Apple The Reason The Price Of Sirius Dropped? [View article]
"You left out pre-owned vehicles with Sirius."
Because the data is even worse. The conversion rate on used vehicles is substantially below new vehicles. The only data point that the company gave investors and analysts about used cars was when they gave out data based on the CPO program - and those are the top of the line used cars. "It's not as high as new cars. It's, in fact, it tracks in the mid- to high 30s right now. " (Read http://seekingalpha.co... ). Since that figure has never been updated, I would make the assumption that it's not all that great. Also, consider that total reactivations of used cars is only expected to be 1.5 million vehicles this year (vs. more than a million last year). That accounts for almost the entire self-pay net add figure for 2013.
And, yes, the stats have held relatively constant, but that's despite an improving economy. The reasons we saw a growth in subs had largely been due to an increasing penetration rate in new cars and an increase in new vehicle sales. Unless the new vehicle penetration increases (not expected to occur) or new vehicle sales continue making substantial gains, the growth from that segment is over. Now it's up to the used cars. And, I'm expecting those performance characteristics to be worse than new cars.
Is Apple The Reason The Price Of Sirius Dropped? [View article]
"and the audio quality is definitely worse than Sirius."
I have heard the same complaint from audiophiles about the satellite service since Sirius added channels and cut the bit rate.
Is Apple The Reason The Price Of Sirius Dropped? [View article]
"I don't have a cell plan. It's too expensive. A lot of people don't."
A lot more folks don't have Sirius than don't have cell plans. You seem to be in the minority of those choosing to forego cell phones and in the minority of folks choosing to subscribe to Sirius.
Is Apple The Reason The Price Of Sirius Dropped? [View article]
"Not really. $14/mo ($8 for a la carte)."
First, it's $14.49 per month plus $1.81 MRF plus fees and taxes. And, very few folks take the a la carte plan. And, whether you or I think it's a lot of money or a little bit of money, MOST folks won't open their wallets to pay for it. The conversion rate of less than 50% and the cancellation rate of more than 20% per year bear this out.
"And you didn't address the spotty nature of Internet over cell phone."
True, and it's a reason that many folks DO subscribe and is a reason that there are satellite radio devotees. As I stated, Sirius satisfies and provides value to a niche market, and it is a sizable niche market. However, I also see growth as limited and many of the Wall Street analyst price projections as unwarranted.
Is Apple The Reason The Price Of Sirius Dropped? [View article]
"I see no catalyst for growth in the S/XM tech. "
Thanks for the ("rambling") comment. I tend to agree, except that I see some limited amount of growth ahead for Sirius, just not enough to justify the current multiple. That doesn't mean that EPS doesn't continue to grow for a while as debt gets eliminated and other pre-merger contracts get renegotiated and future price increases take place.
And even when saturation gets close, as with cable TV, there will be significant cash generated that will need to be returned to shareholders.
While cellular tech and coverage continues to improve and grow, it will be a long time, if ever, before it represents a true threat to a significant portion of Sirius's core listening base.