Is Apple The Reason The Price Of Sirius Dropped? [View article]
wwtimewarp-
"Unfortunately, AAPL cannot put one foot in front of the other without Jobs. "
Jobs has had his share of mistakes. Folks only seem to remember the positives. I remember the bailout by Microsoft just to keep Apple afloat and fend off the some of the monopoly suits. Many of those brilliant ideas came from a visit to Xerox PARC in Menlo Park. Others were repackaging of other ideas at the right time and some strong marketing.
Whether Cook can shepherd Apple forward or not remains to be seen, but a company that has as much cash as Apple can afford a few mistakes. And, as I noted in a comment above, I'm more interested in what the implications are for Apple iOS7 in the car. Will this limit Sirius revenue opportunities around the connected car?
(BTW, iMatch is interesting as an ad-free, cloud based alternative for $25/year.)
Is Apple The Reason The Price Of Sirius Dropped? [View article]
dbadanbet@aol.com-
"you doubted it!"
And you point would be...? All you have done is write about unsubstantiated price manipulation. It's getting boring. Lay out your proof instead of libeling Sirius management by continuing to state it as though it were a fact.
Is Apple The Reason The Price Of Sirius Dropped? [View article]
Wiseman1-
"SIRI in the car is a powerful product that will not be easily dislodged."
Thanks for the comment. Let's not overestimate the power of "SIRI in the car." It may not easily be dislodged as a radio, but most people are still unwilling to pay for radio. More importantly, the type of connected car aspects that Apple can bring into the picture could put a dent in the plans of Sirius to develop this additional revenue stream.
Is Apple The Reason The Price Of Sirius Dropped? [View article]
rmmersk-
"streaming music, sports, or what have you via internet is expensive."
So is listening to Sirius. Many iPhone users use their phones extensively for accessing the Internet, including video. That's much more intensive data usage than music, and these folks are used to large cell phone bills.
Is Apple The Reason The Price Of Sirius Dropped? [View article]
halito27-
"What do you know about the remaining time on SIRI's most significant contracts (Howard, sports, etc.)? "
Not quite as much as I should. Content contracts are all over the place. Howard has a relatively long contract but is already halfway through his 5 year renewal. Most other personalities are of a shorter duration. Of the pre-merger contracts, only Fox news, MLB and NHL are still out there. Fox expires in the fall of this year... NHL and MLB are after the 2015 season.
Frear discussed how the costs that were $400 million pre-merger are down to $300 million. We've all seen what happened to the NFL prices in television bidding wars. If competitors saw an economic benefit....Or, if Sirius kept satellite transmission while others set up non-exclusive Internet deals or...
Sirius offers a convenience factor. However, consider that something like Bloomberg is available on Satellite, but is also available over the Internet.
Is Apple The Reason The Price Of Sirius Dropped? [View article]
dbadanbet@aol.com-
"Now you know all the specifics?"
From the Q1 10Q and conference call, any intelligent investor can determine the specifics.
"Have you ever thought that they let the price zoom higher so that they could sell some with a profit that could be used to buy back more in the future."
Who is this "they"? Sirius must disclose those sales, and if they were selling in the midst of a buyback, there would be a line of lawyers a mile long preparing shareholder suits.
It sure looks like it. First, the the link says they have $6.7 billion of debt outstanding, and that's wrong. Second, it doesn't even show the $700 million at 7.625% (it's in the most recent 10Q). Third, there is no 9.75% 9/1/2015 issue outstanding... that was called last year. Anyway, Timothy said the next three years, and both those debt issues are either callable or mature in Timothy's three year window.
"You had mentioned you purchased in a similar area in January at a similar price to SIRI's average purchase price Feb - Q1 call, I believe, as part of your covered call strategy."
I had some smallish positions assigned in December at the time of the ex-div. I wrote an article about using $3 January 2014 covered calls as a way to to grab a conservative 12%-25% return. http://seekingalpha.co...
Then, my largest position was assigned in January of this year. I sat on the sidelines until March, when I wrote the following article http://seekingalpha.co... and included this observation: "They [the analysts] have target prices that range from a low of $2.45 to a high of $4.20 with an average around $3.50. That $3.50 average price target is slightly above the upper bound of my fair value estimate based on my 2014 anticipated FCF/share."
So, I bought at about 5% less than the average paid by Sirius, but more importantly, the $3.50 is ABOVE my range of fair values. In that sense, I think Sirius is paying too much if they were buying above $3.50. And, I wouldn't mind a cash build-up to eliminate callable debt (or when it comes due) and I'd rather get a dividend and pick my own buy-in prices. Who knows where interest will go when QE ends?
"Timothy is welcome to his opinion but I don't think he looked into this enough."
Maybe Timothy didn't do enough research, but relying an bad data from Morningstar suggests the same.
One final note. I prefer FCF as a valuation method over EV/EBITDA for a variety of reasons. It's more difficult to manipulate.
Is Apple The Reason The Price Of Sirius Dropped? [View article]
fauxscot-
"If Sirius isn't worried, they should be. "
I think Sirius investors may have a bit more reason to be "worried" than Sirius management although management should certainly be concerned about what Apple does. Sirius caters to a particular niche - a large niche, but still a niche. It's the growth multiple built into the share price that is the cause for concern.
Is Apple The Reason The Price Of Sirius Dropped? [View article]
dbadanbet@aol.com-
"Sirius has bought back about 209 million shares from January to May at now seemingly attractive costs of between $2.90 and $3.15 per share. "
Once again with the manipulation? First of all, the 209 million shares purchased took place between February 5th and April 26th. The shares traded below $2.97 on only one day during that time and the average price for the the 152 million shares purchased during Q1 was $3.14.
Second, if they could hold the price down, why didn't they keep it down so they could finish the buyback?
Is Apple The Reason The Price Of Sirius Dropped? [View article]
aardvark3-
"Apple will dominate this arena"
I don't expect Apple to dominate, and I don't expect they will be alone in their efforts. But it would certainly be interesting if they were awarded a design patent for the look and feel of that plastic dashboard. ;-)
Is Apple The Reason The Price Of Sirius Dropped? [View article]
"Unfortunately, AAPL cannot put one foot in front of the other without Jobs. "
Jobs has had his share of mistakes. Folks only seem to remember the positives. I remember the bailout by Microsoft just to keep Apple afloat and fend off the some of the monopoly suits. Many of those brilliant ideas came from a visit to Xerox PARC in Menlo Park. Others were repackaging of other ideas at the right time and some strong marketing.
Whether Cook can shepherd Apple forward or not remains to be seen, but a company that has as much cash as Apple can afford a few mistakes. And, as I noted in a comment above, I'm more interested in what the implications are for Apple iOS7 in the car. Will this limit Sirius revenue opportunities around the connected car?
(BTW, iMatch is interesting as an ad-free, cloud based alternative for $25/year.)
Is Apple The Reason The Price Of Sirius Dropped? [View article]
"you doubted it!"
And you point would be...? All you have done is write about unsubstantiated price manipulation. It's getting boring. Lay out your proof instead of libeling Sirius management by continuing to state it as though it were a fact.
Is Apple The Reason The Price Of Sirius Dropped? [View article]
"SIRI in the car is a powerful product that will not be easily dislodged."
Thanks for the comment. Let's not overestimate the power of "SIRI in the car." It may not easily be dislodged as a radio, but most people are still unwilling to pay for radio. More importantly, the type of connected car aspects that Apple can bring into the picture could put a dent in the plans of Sirius to develop this additional revenue stream.
Is Apple The Reason The Price Of Sirius Dropped? [View article]
"Very logical."
Thanks.
Is Apple The Reason The Price Of Sirius Dropped? [View article]
"Why would I want to pay Sirius XM Radio"
You wouldn't, unless you need to have commercial free music or certain content not available elsewhere.
Is Apple The Reason The Price Of Sirius Dropped? [View article]
"Sirius makes 10 mill a day that's all i need to know "
It shouldn't be all you need to know. That's revenue, not profit. And then you should also be considering how much that is per share.
Is Apple The Reason The Price Of Sirius Dropped? [View article]
Not falling, but it is getting overcast.
Is Apple The Reason The Price Of Sirius Dropped? [View article]
"streaming music, sports, or what have you via internet is expensive."
So is listening to Sirius. Many iPhone users use their phones extensively for accessing the Internet, including video. That's much more intensive data usage than music, and these folks are used to large cell phone bills.
Is Apple The Reason The Price Of Sirius Dropped? [View article]
"What do you know about the remaining time on SIRI's most significant contracts (Howard, sports, etc.)? "
Not quite as much as I should. Content contracts are all over the place. Howard has a relatively long contract but is already halfway through his 5 year renewal. Most other personalities are of a shorter duration. Of the pre-merger contracts, only Fox news, MLB and NHL are still out there. Fox expires in the fall of this year... NHL and MLB are after the 2015 season.
Frear discussed how the costs that were $400 million pre-merger are down to $300 million. We've all seen what happened to the NFL prices in television bidding wars. If competitors saw an economic benefit....Or, if Sirius kept satellite transmission while others set up non-exclusive Internet deals or...
Sirius offers a convenience factor. However, consider that something like Bloomberg is available on Satellite, but is also available over the Internet.
Is Apple The Reason The Price Of Sirius Dropped? [View article]
"Now you know all the specifics?"
From the Q1 10Q and conference call, any intelligent investor can determine the specifics.
"Have you ever thought that they let the price zoom higher so that they could sell some with a profit that could be used to buy back more in the future."
Who is this "they"? Sirius must disclose those sales, and if they were selling in the midst of a buyback, there would be a line of lawyers a mile long preparing shareholder suits.
Is Sirius XM's Buyback 'Terrible?' [View article]
"Is this data wrong?"
It sure looks like it. First, the the link says they have $6.7 billion of debt outstanding, and that's wrong. Second, it doesn't even show the $700 million at 7.625% (it's in the most recent 10Q). Third, there is no 9.75% 9/1/2015 issue outstanding... that was called last year. Anyway, Timothy said the next three years, and both those debt issues are either callable or mature in Timothy's three year window.
"You had mentioned you purchased in a similar area in January at a similar price to SIRI's average purchase price Feb - Q1 call, I believe, as part of your covered call strategy."
I had some smallish positions assigned in December at the time of the ex-div. I wrote an article about using $3 January 2014 covered calls as a way to to grab a conservative 12%-25% return. http://seekingalpha.co...
Then, my largest position was assigned in January of this year. I sat on the sidelines until March, when I wrote the following article http://seekingalpha.co... and included this observation:
"They [the analysts] have target prices that range from a low of $2.45 to a high of $4.20 with an average around $3.50. That $3.50 average price target is slightly above the upper bound of my fair value estimate based on my 2014 anticipated FCF/share."
So, I bought at about 5% less than the average paid by Sirius, but more importantly, the $3.50 is ABOVE my range of fair values. In that sense, I think Sirius is paying too much if they were buying above $3.50. And, I wouldn't mind a cash build-up to eliminate callable debt (or when it comes due) and I'd rather get a dividend and pick my own buy-in prices. Who knows where interest will go when QE ends?
"Timothy is welcome to his opinion but I don't think he looked into this enough."
Maybe Timothy didn't do enough research, but relying an bad data from Morningstar suggests the same.
One final note. I prefer FCF as a valuation method over EV/EBITDA for a variety of reasons. It's more difficult to manipulate.
Is Apple The Reason The Price Of Sirius Dropped? [View article]
"...instead of quality content."
There is very little of the Sirius content that can't be bid for.
Is Apple The Reason The Price Of Sirius Dropped? [View article]
"If Sirius isn't worried, they should be. "
I think Sirius investors may have a bit more reason to be "worried" than Sirius management although management should certainly be concerned about what Apple does. Sirius caters to a particular niche - a large niche, but still a niche. It's the growth multiple built into the share price that is the cause for concern.
Is Apple The Reason The Price Of Sirius Dropped? [View article]
"Sirius has bought back about 209 million shares from January to May at now seemingly attractive costs of between $2.90 and $3.15 per share. "
Once again with the manipulation? First of all, the 209 million shares purchased took place between February 5th and April 26th. The shares traded below $2.97 on only one day during that time and the average price for the the 152 million shares purchased during Q1 was $3.14.
Second, if they could hold the price down, why didn't they keep it down so they could finish the buyback?
Is Apple The Reason The Price Of Sirius Dropped? [View article]
"Apple will dominate this arena"
I don't expect Apple to dominate, and I don't expect they will be alone in their efforts. But it would certainly be interesting if they were awarded a design patent for the look and feel of that plastic dashboard. ;-)