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Stephen Faulkner  

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  • Sirius XM: Take Rates In Connected Cars 'Higher' [View article]
    I'm having deja vu. You posted this elsewhere that I saw today, I think?

    Explain why you feel SIRI buying back puts longs "in trouble" as you state.

    I'll respond piece by piece now that I have a little time:

    "There is no direct benefit to an average shareholder to have a measured buyback in a pps window of $3.00-$3.25... all this does is increase LMCA's % ownership... The buyback is supposed to be a way to return capital to shareholders or create either a considerable reduction in float that theoretically INCREASES pps for everyone"

    Eh, no, not really. A buyback is supposed to return capital in that the buyback allows the company to remove shares from the market increasing earnings and reducing multiple. This 'should' increase share price. It works if the company appreciates at a level faster than inflation, borrowing costs to perform the buyback, etc. So, for instance, if SIRI were to expect $4 per share EOY, and borrows $2 billion at 5% to do so, and buys SIRI between 3 and 3.25 as you state, they spend $2 billion plus 5% interest so $2.1 billion, but what they bought back (if we consider worst case they are all purchased at the high of $3.25) was 615 million shares. These 615 million shares are now worth $4, or $2.46 billion... thus they spent 5% but received a return of 23.5% or a net return of 18.5%. It is arguable whether, with a dividend, investors could have pulled a greater return. If growth continues this return compounds.

    There are a lot of other moving parts to this but this is just one basic issue.

    Don't focus on whether or not this increases Liberty's percent. If they choose not to sell back, then who cares? If they wish to participate on a 50% basis into the buyback, who cares? They are already over 50%. A share is a share is a share. All that investors should be concerned about is what price SIRI pays on average for the shares, and what price investors expect SIRI to be after X timeframe. It doesn't particularly matter where they come from. Arguably if they ALL come from the retail float it is "better" in some ways, but that introduces more speculation. On the most basic of levels, all that matters is what SIRI pays for them and the expected return on SIRI's investment in itself.

    "A trickling buyback that is capped at $3.25"

    Capped by who? Cramer? Is this like the supposed $2.15 cap that Liberty said they would pay as outlined by the commenting author with dissenting opinion in my article here :

    http://seekingalpha.co...

    I do not know of any instance where SIRI or LMCA has made any sort of statement as to a $3.25 cap. I do know that this was a one off from Cramer... and his opinion is off the cuff with little to no research.

    "Siri is supposed to be retuirning capital to ALL shareholder's and not just the majority one.. Anyone can sell their shares now into the open market and get $3.00/share so buying back slowly and secretly does nothing for everyone else "

    It is returning capital to all shareholders, by investing in itself. This does not only benefit the majority shareholder at all. And you may sell back at the same prices if you wish to sell into the buyback, that the majority shareholder, LMCA, sells back at if they decide to do so.

    As I responded to you at the other location, I am not sure what you are looking for? If it is for SIRI to buy back recklessly so that it spikes the price, then I think you can forget that. Buys will come in strategic fashion, not with reckless abandon. And of course they will be secret. Why would SIRI disclose when they are buying and how much they are willing to pay? As an investor I would be absolutely furious if they did not conduct this buyback properly, or do something so foolish as to make public their purchases before they did them, rather than attempt to get the very best price they could.
    Mar 14, 2013. 08:46 PM | 2 Likes Like |Link to Comment
  • Sirius XM: Take Rates In Connected Cars 'Higher' [View article]
    Oh you think it's starting to come off the table?

    Sir there will be NO END to the comparisons and the references and the doom and gloom and the SIRI rules! arguments and back and forth.

    I will say one thing. It seems readers shy away from this stuff for the most part. If viewership of articles is any metric, any article open to argument about social radio or P / SIRI or whatever may get a ton of comments, but man do they STINK on shares / views. I might actually write something about that... because by my observation, I don't think investors (for the most part) care about this back and forth. I'm not surprised, either. I just don't see "social radio" as a threat to SIRI and SIRI as a threat to "social radio" (even if I may have in the past to some extent). If anything is a threat to either, it's themselves. SIRI to SIRI and "social radio" to "social radio". But agree with you both are a serious threat to AM / FM.
    Mar 14, 2013. 08:27 PM | Likes Like |Link to Comment
  • Sirius XM: Take Rates In Connected Cars 'Higher' [View article]
    "In the past couple of years the churn and conversion percentages each lost a decimal place. Sirius is disclosing less info, and as a result, I will assume the worst. "

    Huh?

    From SIRI 2012 10K :

    http://bit.ly/12UltP2

    Churn 1.9% for 2010, 2011, and 2012.

    Conversion rate 46% 2010, 45% 2011, 45% 2012.

    I don't see churn losing anything? Unless it's a one hundredth of a percent (or I guess up to about nine hundredths of a percent, due to rounding)?

    Conversion rate lost a percentage point, and again due to rounding could be anywhere from a tenth of a percent variance to nineteen tenths of a percent. (or 19.999999 tenths of a percent... but you get the idea).

    I dunno I just see little concern when stuff moves in quantities so small over long periods. Yeah keep an eye on it... but jeez, a hundreth of a percent on churn can move the number a tenth due to rounding... a hundredth of a percent is a whopping 1900 subs in a month, give or take. Less than 500 a week, on a 19 million base. I'd expect variances at the level of hundredths of a percent due to an ENORMOUS amount of factors.

    Before 2010 they did disclose more of the number on conversion rates but churn was still listed the same :

    Churn 2007 1.7%
    Churn 2008 1.8%
    Churn 2009 2.0%

    Conversion 2007 47.4%
    Conversion 2008 44.2%
    Conversion 2009 46.4%

    Under the current reporting these would have truncated the decimal. Regardless, it seems SIRI has averaged about 45.5% conversion and 1.875% churn with minimal variance (quick head math... may be off a tiny bit).

    25 Million March, could be rounding to nearest whole million. Would require 600k adds, not 1.1 mil. I mean I guess he could say we have 24.5013 million or something but I'd expect it was rounded and genuine. Like I responded to a poster, though, I prefer to see such data in the quarterly rather than assume here, even if it sounds good. He's gonna look pretty stupid if they Q comes out and it doesn't round to 25.

    Just don't feel like he's being deceptive / screwing with everyone at the conference. We'll have to disagree there.
    Mar 14, 2013. 08:21 PM | 1 Like Like |Link to Comment
  • Sirius XM: Take Rates In Connected Cars 'Higher' [View article]
    I will say that I'm getting annoyed with how many times I get renew mailings on my old Stiletto S100 or whatever the thing was. Since I got the Lynx and a new subscription on it and canceled the Stiletto I get something in the mail monthly for a $25 / 6 month deal to reactivate it.

    SIRI could save a few bucks if they would ask a canceling user for a reason, and put them on a do not mail list if the user is changing vehicles, or upgrading a retail radio (or putting a Lynx in a car with a factory radio and not using the factory radio). I know those mailings do not cost a fortune but they cost *something.*

    Put that saved money into marketing and educating the masses / building the brand! (Just no "flash mobs" please... that's 100X more annoying than getting the mailings lol)
    Mar 14, 2013. 07:48 PM | Likes Like |Link to Comment
  • Sirius XM: Take Rates In Connected Cars 'Higher' [View article]
    And again, thanks. Will be interesting to see how that number comes through in the Q1 call.
    Mar 14, 2013. 06:26 PM | 1 Like Like |Link to Comment
  • Sirius XM: Take Rates In Connected Cars 'Higher' [View article]
    Thank you Bluejay.
    Mar 14, 2013. 06:25 PM | 1 Like Like |Link to Comment
  • Sirius XM: Take Rates In Connected Cars 'Higher' [View article]
    Eh... I guess. I mean an argument could be made that maybe the connected cars are dropping in take rate from the previous 70% and he meant "higher" than the take rate on their lowest percent take rate non connected cars. Comments and statements can be torn to shreds and then picked back up and torn into even smaller shreds if needs be.

    There's really no guarantees. The guy could be saying the take rates are higher but they are actually lower, under the right circumstances.

    In my *opinion* I feel he's not some fool who sits there looking at the data and bugs his eyeballs out but MISSES that the take rate has nothing to do with the car being connected, but rather it's just the high priced cars and they have always had a high take rate. I mean, if this is just simply a case of connected cars happening to be high priced cars I would classify his response here saying he "tend(s) not to believe the data" as him painting himself as a complete fool who doesn't understand his own company. Why would he not understand historic take rates? Why would he tend not to believe the data?

    Is Frear screwing with everyone at the conference? Being deceptive? Lying about tending not believing this? Is he an idiot?

    My take is that no, he is not doing these things and that he is not some idiot who doesn't understand the metrics. My take is that no, this is not simply a matter of higher priced vehicles being more likely to be connected and no, he is not being deceptive.

    "Aside from that, I'm one that believes, as Frear sort of said, that delivering music over the crowded cell phone airwaves is just stupid. The most efficient way is broadcast - either satellite or terrestrial. "

    Ya.
    Mar 14, 2013. 05:35 PM | 1 Like Like |Link to Comment
  • Sirius XM: Take Rates In Connected Cars 'Higher' [View article]
    Transmitters, repeaters, whatever. I don't lose signal. I have a Lynx. I am fairly sure that uses XM (or both).
    Mar 14, 2013. 04:05 PM | Likes Like |Link to Comment
  • Sirius XM: 414 Million Shorts Can Be Wrong [View article]
    Explain "longs are in trouble". Do you propose SIRI buy back and ratchet up the price in quick fashion? Cuz that's the other option vs.. a slow and steady buyback.
    Mar 14, 2013. 02:46 PM | Likes Like |Link to Comment
  • Sirius XM: Take Rates In Connected Cars 'Higher' [View article]
    Ok sorry guys this comment section is a mess. Appreciate the nice comments and such but I think I'm gonna pass on digging in here and commenting further... Too much of a headache. Road I never should have gone down :) Lesson learned! (Hopefully)
    Mar 14, 2013. 01:03 PM | Likes Like |Link to Comment
  • Sirius XM: Take Rates In Connected Cars 'Higher' [View article]
    Nino SIRI has urban transmitters that do reach into tunnels. Going under Boston I get a signal for most of the journey, although it cuts out right in the middle... but so does FM / AM and I lose data there too.
    Mar 14, 2013. 12:48 PM | 1 Like Like |Link to Comment
  • Sirius XM: Take Rates In Connected Cars 'Higher' [View article]
    Ah ok I thought you meant previously in the comments.

    I'll agree that it may be a stretch to suggest that connected cars are helping Sirius XM in a definitive sense and I could have used "appear to be" there. But Frear's comments do not support that they are hurting Sirius XM.
    Mar 14, 2013. 12:46 PM | 1 Like Like |Link to Comment
  • Sirius XM: Take Rates In Connected Cars 'Higher' [View article]
    We'll see. If it does it does if it doesn't it doesn't. I know that's not particularly helpful ... but I think it's inconsequential other than a fun guessing game (unless one needs to sell "soon" in which case they should not be trying to chase a few pennies to the upside).

    I'm comfortable with a 3.40 end of month target still but am cautious about the overall market and it going up every day....
    Mar 14, 2013. 10:48 AM | Likes Like |Link to Comment
  • Sirius XM: Take Rates In Connected Cars 'Higher' [View article]
    We'll see how this number comes through in the quarterly :) Sounds good... but I wanna see that number printed.
    Mar 14, 2013. 10:46 AM | 1 Like Like |Link to Comment
  • Sirius XM: Take Rates In Connected Cars 'Higher' [View article]
    "Sirius may not be losing too many - if any - customers to P (just isn't enough data), but there is no evidence to suggest that the connected car is helping the Sirius business model."

    I don't think I suggested that the connected car is helping Sirius' business model, just that it did not appear to be hurting it as some have expected.
    Mar 14, 2013. 10:44 AM | 3 Likes Like |Link to Comment
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