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jswede
156 Comments
Why Is Sirius XM Radio Stock Going Down?
but "loving" a company's service does not make it a good investment. it doesn't make it solvent either.
Why Is Sirius XM Radio Stock Going Down?
EXACTLY.
Why Is Sirius XM Radio Stock Going Down?
you say: "Everyone has know about their debt for years. YEARS. Now its a problem, when refinancing will never be easier for them. They will get a credit upgrade soon, as well, yes another one. By the time they refinance, they will use a bank this time, as you can see, the common has no more interest(it does, but thats what they will say). "
The following statement is so clueless/ignorant/stup... it's almost criminal:
"when refinancing will never be easier for them"
Right NOW is probably the MOST DIFFICULT time in the last decade to get financing. If you have no net assets (like SiriXM) it's pretty much impossible. Do you base your statement on anything real? Is it all just fantasy/wishful thinking?
And how about this one : "Everyone has know about their debt for years"
Get your head out of the sand -- SiriXM just had to borrow at freaking 16% 6 weeks ago. Expect refinancing, if at all possible, at 16% or higher in 2009. The NEW debt and these nosebleed interest rates have NOT "been known for years". The cost of credit has repriced drastically - THIS IS ALL NEW.
As far as you hanging on to the ratings: the ratings agencies don't really matter anymore -- S&P and Moody's are JOKE. SIRI is Caa2 with a **NEGATIVE watch** by Moody's -- there's 17 ratings above Caa1, and only 3 below, until you get to "D"... for Default. S&P has a similar CCC rating. Again, these ratings, and any upgrade, mean nothing. (and an "upgrade"???... what???? did you just say that? fantasy-land again?? lol.)
"They will use a bank this time [to refinance]"....
You really need to get out more. Have any idea what is happening in the financial sector? The gig is up, the "house of cards" leveraged balance sheets and bad loans are coming home to roost - banks are going out of business left and right and will continue to do so for the next year. Lehman, Merrill, you name the bank, are all borrowing for themselves at 10%+, they are barely alive... and you think they are going to extend a line-of-credit to 'never been profitable, deep in debt, slowing subscriber base' SiriXM at a level lower than 16%??? You are clueless.
If the credit market stays the way it is right now for the next year - and it very very likely will, if not worse - the 16% interest rates will be considered "cheap" financing for this company. They will essentially be shut out of the credit markets and only get financing by way of a capital raise where they give away their upside to the new investors.... massive dilution. IF the credit markets get a little better, expect those mid-teen levels for the $1bil to re-fi in 2009... that's another $150mil a year in interest payments..... on top of the the $140mil/yr they just added... on top of the other, existing debt...
The blatant disregard, and lack of understanding of the 400 lb gorilla in the room is hard to believe.... cos, you've at least considered it in your analysis... you other bulls... hard to feel sorry.
What to Expect in Tuesday's Sirius XM Radio Conference
no idea, even with your astronomical optimism on revenues and expenses, how you think they'll pay off that debt.
their balance sheet has liabilities $900mil greater than assets. they are about to refinance about $1bil in '09 at 15-16%....
"sniff being debt free by end of 2009"??? what???
What to Expect in Tuesday's Sirius XM Radio Conference
I've just become fascinated by the fact that not one person mentions the massive debt on these threads. It's like it doesn't exist. So I visit from time to time to see what the thoughts are...
What to Expect in Tuesday's Sirius XM Radio Conference
>> $600mil, less ~$300mil in interest expense, somehow pays off $4bil in loans and debt in 3-4 years? is that right?
What to Expect in Tuesday's Sirius XM Radio Conference
What to Expect in Tuesday's Sirius XM Radio Conference
>> now THAT, is some funny math.... so if they have EBITDA of $600mil ($2.7b - $2.1b), they will "pay off their debt in a few years"!??!!?
They are/will be paying about $400mil a year in INTEREST going forward -- so even if they can use the other $200mil to pay down debt, it would take them DECADES to pay it down.
What to Expect in Tuesday's Sirius XM Radio Conference
>> Mel buying 2mil shares? That's change lying around his house -- less than $3mil. He was getting $20mil/yr at Viacom - he mase $100mil in 5 years there. A little buy of ONLY $3mil in the company he runs, is preaching positive about, and is trading dirt cheap is more a sign of trouble than of confidence.
Goldman owns like nothing. I see 3.1mil shares, is that right? They bought 1.4mil in June - that was a rebalancing - they were simply underweight Sat Radio b/c the stock lost so much in value.
"Their enemy: You and I, the shareholders. We expect value and to remain in control of the company."
>>Right now, and for the visible future, the bondholders own this company. The equity the shareholders "own" was *negative* $800mil last I checked, and that's not going to improve any, if at all, as "synergies" will pretty much be eaten up by debt costs.
"They are waiting to see if they will make it first. I was hoping a bidder would come in at around 4-6, now Id take 3-4."
>> My guess would be a massive dilution in 2009, by new converts or new equity issued to a provider of capital. All in the $1 range.
What to Expect in Tuesday's Sirius XM Radio Conference
the otherwise "rosy" $350mil loss in 08 and positive $300mil in 09 are EBIDTA, so the above interest costs are not factored in.... neither is...
* $101mil/yr in debt service from the 13% bonds issued July
* ~$40mil/yr from the XMSR 7% converts also issued July
* ~$15mil/yr from the XMSR floaters
* $40mil/yr on the 10% converts due 12/09
* $50mil/yr on the 9.625% of 8/13
..including the $45mil/yr at the top, that's close to $300mil/yr in debt service right there, and there's also a bank line-of-credit around $350mil, IIRC, to refinance in May... and a few other smaller pieces.. Then who knows? Will they need to borrow even more to fund operations...?
regardless, that projected positive EBITDA of $300mil in 2009 doesn't look so positive anymore.... to me, anyway - seems I'm the only one.
What to Expect in Tuesday's Sirius XM Radio Conference
I'd say the 15%-20% range...
What to Expect in Tuesday's Sirius XM Radio Conference
"bro", your problem is you are long a company in deep debt with huge negative cashflow. and that debt is about to cost much more. it's a sprial, dude. get out duuuuude.
What to Expect in Tuesday's Sirius XM Radio Conference
you want to sure someone for selling stock?
What to Expect in Tuesday's Sirius XM Radio Conference
Mortgage Resets: COFI Numbers Improving
>> It used to be - like 10 years ago. There's still paper/loans out there using COFI, but 90+ % of last 5yrs production has been tied to USTs or LIBOR.