R A F

Should Liberty Starz Trade at a Discount?

If the interest from Malone is coming sooner, the share price (current, or on a reverse-split basis) is immaterial; The offer and the deal would be predicated and structured on the price to be agreed upon (current, or adjusted on a reverse-split basis).

There is no tactical value to enact a reverse-split in anticipation of a possible deal, as this could all be built into the negotiations at that time, if needed.


On Nov 15 07:30 AM Pell wrote:

> Agreed RAF. But I just believe the buy from Malone is coming sooner
> therefore, during negotiations Mel wants to do get the best price
> and doesn't want any loose strings to be held over his head.
>
> The stock holders will be rewarded by a premium paid per share for
> this coveted company. Their won't be any time to think if the R/S
> was from strength or weakness.
>
> The worst thing that could happen is institutional investors become
> Longers.

Should Liberty Starz Trade at a Discount?

Much too early to be talking about a reverse split at this time. SIRI is trading from technical strength and probability favors further appreciation into 2010. It would be much better to wait until the stock has appreciated to its indicated objectives well above 1.00 - and demonstrating the solid underpinnings of this company to grow on its own - before enacting a premature reverse split that would be interpreted as only a maneuver to adjust the share price above 1.00 to avoid a delisting notice (also totally out of the question at this time). Sirius XM is now firing on all cylinders and the stock is responding with increasing upside momentum; It would certainly be wise to wait for further gains into the first half of 2010 before contemplating a reverse-split to realign the capital structure. Any move to do so now would be seriously undercutting this upside potential, prematurely. Keep in mind, the resulting share price after a reverse split will be a function of the level of the share price preceding this action, and it is always advisable to wait for the highest possible price before such a decision is enacted. The technical strength of SIRI is now projecting potential toward 1.25 to 1.50 by mid 2010 and any reverse split from that type level would be infinitely better than acting when the stock is well below 1.00.

Should Liberty Starz Trade at a Discount?

One thing is for sure: Sirius XM will be a building block in some deal, sometime, somewhere. It is an extremely attractive vehicle for merger with any one of the many major media entities. SIRI is not in play yet - but it certainly will be, sometime in the future.

Sirius Can Avoid Bankruptcy

Just read the Wall Street Journal article "Sirius XM
Executives Intend to Sell Shares" (page C1 of today's edition) and it is much more balanced than the summary report seen in earlier headlines on Yahoo would indicate. Among other things - this is all part of planned short term compensation and incentives and the named executives "still have significant holdings of Sirius XM shares".
Also - "Mr. Karmazin wasn't among the sellers".
The article went on to cite several positives for the company - such as guidance provided in March that it "expects to generate for the year more than $300 million in earnings before interest, taxes, depreciation and amortization." Barrington Research is also quoted in the article as maintaining an "outperform" rating, citing "the company had improved its cost structure and could generate top-line improvement over the next year or two as it institutes additional subscriber fees".
In sum - the actual article is much more balanced than the headlines would suggest - as usual.

Sirius Can Avoid Bankruptcy

Some interesting articles today, pointing out - validly - the potential negatives and risks facing Sirius XM. Of course, there is also another side - the many positives that are already in place, and additional developments coming on stream within the next few months. Put this all together and decide whether SIRI is properly priced for this balanced equation. My own view is - with the stock trading well below 1.00 (currently in the mid .50's) the threat of bankruptcy is already well priced into investor's considerations. Most investors are in this for the longer term potential of Sirius XM to turn this around and prosper and are not likely to be shaken out of positions that are already priced for a bankruptcy scenario. It is now up to the company to perform - starting with the upcoming 3rd and 4th Qtr. releases (due in November and February). Despite the ongoing manipulation that is seen on a daily basis, true value in this company will emerge if the financial results convincingly affirm that Sirius XM's recovery and turnaround is for real.

Stocks to Buy in Cyclical Advertising Recovery

SIRI's future expansion will certainly come at the expense of terrestrial radio - due to satellite radio's seamless delivery across the entire nation, with clarity and variety of content that is unmatched by any other medium. Also - the widening variety of wireless platforms now emerging as capable receivers of satellite radio greatly enhance the potential universe of satellite radio subscribers into the future. These fundamental realities are driving the turnaround now seen in Sirius XM's outlook and this should keep SIRI technically strong over the intermediate to longer term.