Davis Freeberg

Sirius' Future Looks More Promising Than Ever

Considering the drivel that you write, it's no surprise that you get attacked. In the last 2 years you've been churning out article after article clinging desperately to some kind of pipe dream and yet you've consistently been wrong. How much money have people lost by listening to your advice so far? The mere fact that you view this as at "12 cent stock" instead of taking a cold hard look at the real underlying enterprise value, only demonstrates how little you really know about investing. You complain often about manipulation, but the only one I see manipulating anything is Sirius Buzz who day after day continues to publish misleading articles like this one.

The reason why the stock fell so much post merger has nothing to do with some Sith lord controlling the price of the stock. The blame falls on Karmazin who recognized that the stock was wildly over valued, so he proposed an all stock deal for XM. By doing so, he was able to sucker in arbitrage buyers pre-merger who maintained the inflated stock price for far too long. Once the merger was complete, they exited the market, the false value was destroyed and now we see a true reflection of Sirius/XM's intrinsic worth. To act like "short sellers" are the ones to blame suggests that you are incredible naive about investing or a liar.

Instead of trying to defend a broken business model with a broken balance sheet, why don't you address the VALUATION of Siri/XM. When SIRI dropped below a buck you made a big deal about how it was being unfairly punished and at these "penny stock" levels it was a great buy, but you continue to ignore the billions in debt outstanding and the fact that even at a measly 12 cents a share, it's still trading at a market cap of over $400 million. You're entitled to your opinion of course, but when I look at consumers being more careful with their money, an auto industry in disarray and debt coming due that SIRI has no credible way to pay for, I can't help but disagree about their prospect for bankruptcy. You may or may not actually believe that the listeners will step in and save the company, but I'd argue that it's going to take more then an NPR pledge drive to actually get these guys back on solid footing. At least once they do go bankrupt, I won't have to continue to read about how awesome you think they are every day.

Sirius Shares Priced Like Stamps

It's no wonder that you've lost so much money investing in this stock. Sirius isn't priced like a stamp, they have a market cap of $1.27 billion and an enterprise value that is still over $5 billion. To put so much emphasis on the price per share is dishonest.

Sirius XM Dips Beneath $1: Will the Street Give It Any More Time?

Just about everyday you publish another Sirius article that says why they're so good or why they represent such a great value, yet you still fail to see the real issues. For someone who is tracking this company so closely, it's surprising that you don't have a better understanding of what's driving it's performance. You can talk about NFL deals or Mel's little pep talks or about how this is speculative but could be a bargain, but you never address the valuation. Instead of saying Sirius is under a buck, you should be saying Sirius' stock and debt is worth X. It's easy to trade under a buck when you have this many shares outstanding. Even at these levels the enterprise value for the companies is still ridiculously overvalued. Why not write an article that compares Sirius to other industries and looks at the metrics between this stock and others and then answer the question of which is more expensive. Do yourself a favor and pick the stocks before running the numbers or we'll just see you cherry pick more data to support your crazy assertions that there is value here. The reason why people are so concern with the debt is because of the sheer size of it compared to their real market opportunity. I've never been long or short, but could tell early on that this was a hype job from the beginning. Until people go back to the basics, you'll continue to see value erosion as the market figures this out. Mel knew that this was a problem too, so he created an arbitrage opportunity while they tried to work out their business model. Now that the opportunity is gone, you are continuing to see Sirius return to a more rationale valuation. If Sirius was a small cap start up without any debt your articles might be appropriate, but instead of focusing on every little micro detail like it's going to make you rich, you should instead be addressing the question of what it's VALUATION is worth compared to their peers.

Understanding Sirius' History Of Converts May Ease the Pain

Sirius and XM have been in trouble for a long time. Mel knew it so he hook up his stock price with XM to help preserve the massive satellite bubble that had inflated. Now the arb buyers are leaving and you're seeing all of the value sucked out. You can argue that this is a short term temporary event, but I don't believe it. Even with their monopolistic position there is no justification for the current valuation on the two companies. I see this one ending badly for their shareholders.