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  • Will Sirius Interest Fade As Malone Focuses On Cable? [View article]
    heady-

    "And I have never heard the word mostly used to describe a bare majority. "

    And I have never heard a 56%-44% split referred to as a bare majority. Certainly not when it is used in politics where many consider it a landslide. Read my comment to bluejay7751 elsewhere under this article, The evidence is clear that most people that get a free trial will not remain subscribers, and fewer still will do so without a discount. The numbers don't lie.

    Giving out 10 million new car trials and maybe another 3 million used car trials results in growing the self pay sub base by 1.5 million this year. And, unless something new has changed with retention discounts, one in seven folks are still getting them. What does that tell you?
    Nov 23, 2013. 06:27 PM | 1 Like Like |Link to Comment
  • Will Sirius Interest Fade As Malone Focuses On Cable? [View article]
    heady-

    SA considers comments that are off topic to be part of the broad category of abuse. Since subs were never discussed in this article, it's totally off-topic.
    Nov 23, 2013. 06:19 PM | Likes Like |Link to Comment
  • Will Sirius Interest Fade As Malone Focuses On Cable? [View article]
    Stephen Faulkner-

    "Does borrowing against its SIRI holdings result in taxes paid by LMCA or is there a tax benefit on the interest?"

    There should be a tax benefit on the interest expense. The tax implications of the other transactions are where there may be far more complex results, like the loss of a benefit or increased taxes...

    As to your understanding about interest on HELOC or credit cards... Interest on a HELOC may or may not be deductible. It depends on the usage. If it is used to make home improvements, it is treated as a mortgage interest expense. Otherwise, maybe or maybe not deductible. If it is used to buy a car, probably not, unless the car is used in a trade or for business purposes, in which case it may be a deductible business expense.

    The same could be true for interest on credit card purchases. It it is for typical personal use purchases, probably not. If it is for business use, a different situation. Several years ago I took out the maximum in cash advances at 2.99% and 3.99% interest rates fixed for the life of the balance. Used those proceeds for investments. It becomes a deductible interest expense.

    Not sure what happens if you run up debt for medical bills on a credit card and if that interest is considered part of a medical expense deduction.
    Nov 23, 2013. 01:57 PM | 1 Like Like |Link to Comment
  • Will Sirius Interest Fade As Malone Focuses On Cable? [View article]
    Stephen Faulkner-

    "As long as nothing is done to DROP the share price I'm happy. "

    I would think all the longs feel the same way. Furthermore, I don't believe Liberty would be doing anything to deliberately drop the share price, although if they take certain actions, that could be the result.

    "Better the share price is undervalued on a spin or fairly valued than run up in a haphazard buyback anyways."

    Why would that be?

    "Can they even spin it if it is being used as collateral?"

    My immediate answer would have been "Of course not!" But these guys may be able to figure out a way around it. Just speculating... Could depend on the structure of the loan, so, in certain cases, maybe. I suppose one way it could happen is if the loan obligation was spun out along with the collateral.... just not sure what that would accomplish. It's also why I see the accelerated buyback route as a more likely scenario.

    As to your car or home loan, in some cases they are "assumable" by the buyer. I don't think there are too many of those around any more.
    Nov 23, 2013. 01:44 PM | Likes Like |Link to Comment
  • Will Sirius Interest Fade As Malone Focuses On Cable? [View article]
    sirifair6-

    "Concerning article removal,"

    SA will remove articles if there are enough corrections required and they aren't made, although this is a rarity. This would happen through "Problem with this article? Please tell us. " link at the bottom of every article.

    "...he is the only one who has done this to dozens of my comments that..."

    Authors have no more power to have comments removed than any other SA member. Only the moderator can remove comments. Anyway, why would I do that? I prefer to respond to your comments and point out the flaws, and asking to have your comments deleted would also delete my well constructed rebuttals. ;-(
    Nov 23, 2013. 01:08 PM | 1 Like Like |Link to Comment
  • Will Sirius Interest Fade As Malone Focuses On Cable? [View article]
    Richard-

    Thanks again, but I have no delusions about being an authority.
    Nov 23, 2013. 11:32 AM | 2 Likes Like |Link to Comment
  • Will Sirius Interest Fade As Malone Focuses On Cable? [View article]
    Stephen Faulkner-

    "Are there tax implications on borrowing against a long asset? "

    Yes, and there are tax implications for selling shares and there are tax implications with an RMT and change of control provisions. You were comparing the various alternatives in the your comment, so the question was really rhetorical since I know you didn't. Sometimes tax rules affect the way companies invest and dispose of assets and they can be quite complicated when NOLs are involved.
    Nov 23, 2013. 11:29 AM | 1 Like Like |Link to Comment
  • Will Sirius Interest Fade As Malone Focuses On Cable? [View article]
    Stephen Faulkner-

    "I understand that but I don't think this buyback will not benefit share holders. "

    Nobody ever thinks that, do they? And what if it is to sell back nearly $3 billion of stock - the 700+ million high basis shares at a presumed average of about $4 per share? Does that make a difference?

    If the intention is not to keep Sirius after that sale, but go the RMT route, would that change your view? Liberty wouldn't be holding any shares of SIRI. What if they added a dividend from Sirius up to Liberty - or a loan or other additional transfer premium of $2 billion or so... would that change your view?
    Nov 23, 2013. 11:23 AM | Likes Like |Link to Comment
  • Will Sirius Interest Fade As Malone Focuses On Cable? [View article]
    Stephen Faulknet-

    "I still think SIRI provides a high cash flow asset that can be used as collateral and retained as an asset which appreciates faster than a loan accrues interest (especially in this environment)."

    Sounds similar to STARZ... And they had STARZ pay Liberty that 10 figure dividend prior to separation. It's why I have no illusions about LMCA holding onto the asset or being overly concerned about the price of SIRI once it gets the cash it needs or after SIRI is spun. And it's why I don't yet see one alternative vs. another as more "probable."

    Hoping you get healthy quickly... Maybe some good will come out of it as I am now just a bit more motivated to get that flu shot. ;-)
    Nov 23, 2013. 11:14 AM | 1 Like Like |Link to Comment
  • Will Sirius Interest Fade As Malone Focuses On Cable? [View article]
    sirifair6-

    "It appears to me you would never ever invest in start-ups like facebook or apple. This is certainly your right and choice and it would be outright wrong to judge you. But this does not mean that others could or should not so that either."

    Many of us can not invest in "start-ups" because we fail to reach the definition of a qualified investor. Others should not because they can not afford the risk. And, few of us are able to participate in IPOs. However, I think you are referring to something other than start-ups or IPOs when you use the term.

    I have invested in young companies and currently hold one (CPST) since 2007 that has failed to make a dime. It has been a poor investment choice, and if it wasn't for trading additional positions on some of the volatility around the share price, I would be down more than 50% on that investment and may never recover. As it is, trading extra positions has allowed me to profit.

    I have owned and invested in many companies when they were quite young - companies as diverse as PFSWeb, Home Shopping, Steve Madden, etc, - and some have worked out and some have blown-up and disappeared altogether. However, I should also point out that I have invested one of my most precious assets in what you refer to as start-ups - myself. I spent 7 years of my career working at very young companies in the high tech sector.

    "On the other hand, investing in the company with about 26M subs, no direct competition except for terrestrial radio plagued with ads run every minute is an absolutely reasonable risk."

    It could be, providing the share price is "reasonable" relative to the risk. And a reasonable risk alone is not enough to make something a good investment. It is the expected return for taking on that level of risk and the duration of one's time horizon. For Sirius, there were times when I thought the price justified the risk and other times when I thought it did not. There were times when it was overvalued when one should have taken profits and invested them elsewhere.

    And, I would never claim that Sirius has "no direct competition" under any circumstances. Sirius will, in my opinion, always be a niche player in listening entertainment. It is a large enough niche to remain profitable, but it will always be a niche. There are too many listening alternatives that many would find completely acceptable, and time and again, the data points this out.

    "What siri cannot afford is the debt at 8 or 10%% in five years"

    So it stops borrowing in 5 years and uses FCF to retire debt rather than buy back shares at that time? And, who is to say that interest rates for Sirius won't get that high before 5 years?

    "Being a discretionary service, siri will keep benefiting from improving economy and aged auto crunch that is unprecedented being at over 10 years of age."

    I'm not buying it. First, cars are getting older because they are being built better and designed to last longer. Second, folks are buying new cars = more than 15 million this year - and these folks should be able to afford a subscription. They are choosing not to do it. Read my comment to Bluejay7751 and explain to me why folks aren't opening their wallets and paying for the service. Do you really thing that if another 3 million cars are sold, things will dramatically change?

    As to the dividend, I have many companies that do not pay a dividend in my portfolio. None of the others are currently borrowing money to buy back shares.
    Nov 23, 2013. 11:01 AM | 1 Like Like |Link to Comment
  • Will Sirius Interest Fade As Malone Focuses On Cable? [View article]
    Stephen Faulkner-

    "It only takes a moment of thinking to understand which of the options is most reasonable and probable given LMCA's larger stake in SIRI."

    I wish that were true. Have you considered tax implications? Cash needs of LMCA? If Liberty's only motivation is to suck out as much cash as possible in the near term, it may not care a lot about the price of SIRI when it spins its stake in an RMT.
    Nov 23, 2013. 05:36 AM | 1 Like Like |Link to Comment
  • Will Sirius Interest Fade As Malone Focuses On Cable? [View article]
    SXM_Permabull4Life-

    "Without being more quantitative, your points of caution are speculative at best as what the impact on share price will be is difficult to estimate."

    It sure is difficult to estimate, and with the way the news flow kept changing throughout the day, extremely difficult. It also doesn't mean that qualitative discussions are useless.

    BTW, how does one determine responsible borrowing? Does it presume a certain level of growth? Should the company only borrow as much as the projected FCF can retire at maturity? Where will interest rates be in 2, 3, 4, or 5 years? Will there be a debt downgrade? Does Sirius continue to be a growth company or does it flatten at 22 million self-pay subs? Will content costs start to increase above the rate of inflation if IP delivered services decide to start a bidding war to gain market share.
    Nov 23, 2013. 05:32 AM | Likes Like |Link to Comment
  • Will Sirius Interest Fade As Malone Focuses On Cable? [View article]
    Jimmy 1-

    "TWC + Agero = Home + car security."

    Curious... How does TWC and CVU equal home security? My math skills aren't sophisticated enough to solve your equation.

    "Have a nice weekend."

    Thanks, and the same for you...
    Nov 23, 2013. 05:18 AM | Likes Like |Link to Comment
  • Will Sirius Interest Fade As Malone Focuses On Cable? [View article]
    Stephen Faulkner--

    "It's refreshing to see someone else understand this from time to time."

    The problem is that studies show that buybacks - more often than not - fail to benefit shareholders based on the risk adjusted COC.
    Nov 23, 2013. 05:15 AM | Likes Like |Link to Comment
  • Will Sirius Interest Fade As Malone Focuses On Cable? [View article]
    SeattleGoldMiner-

    SA moderators remove comments, not authors, and I have had more than my share of my own comments removed.

    "so lever away SIRI and buy back from any and all till debt service becomes problematic relative to cash flow. "

    Or until Janet removes QE and Sirius needs to re-fi.

    "Of course anyone with $3.50 covered calls is NOT really long SIRI, but hoping that SIRI winds up at $3.50 for optimal opportunity going forward upon expiration."

    Sure I'm better off at $3.50 - or even $3 or any price below $3.50, or in my case $3.75 - than an uncovered long, but I'm NOT really short either. My broker has me long the shares and short the call. I'm fine with Sirius at its current pricing, or even having the shares called away. It occurred last January with my positions at $3, and I was able to reopen the position within a couple of months with a $3 purchase price and made some money trading in the interim. So, if my shares get called away at $3.50 and I can buy back in at less than $3.75, I'm ahead, and making more money that the buy and hold crowd. Just the way I was ahead for the past couple of years by selling $3 covered calls.

    Some folks just aren't satisfied with a 30% yield with reduced risk.
    Nov 23, 2013. 05:08 AM | Likes Like |Link to Comment
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