satellite radio is dead

Sirius Satellite Radio is Seriously Undervalued

You satellite radio investors are just hilarious, I love making money shorting these stocks! It's clear that you don't even understand the very basics in terms of a company's financial structure, and that's why I continue to make money off of your stupidity.

Hey dolts, wake up: these companies are two years behind on the subscriber forecasts they gave the Street back in 2002, important because said forecasts were essential in order to justify the overwhelming debt load and burdensome opex structure each had deployed. On top of that, the fees that each are paying to offer the programming are so nosebleed-high that they're not generating any return on the investment. And when you have to give warrants, options, and shares to these programming sources in order to sustain the relationships, you're in deep trouble because it merely dilutes your earnings per share all the more. Geez, neither of these two companies is even operating cash flow positive, and you're investing in these companies? Are you that stupid?

The bottom line is that, no matter how much you love the service, XM and Sirius, combined, are roughly 5 to 7 million subscribers short of where they need to be to grow profitably. That's why the merger took place, duh? The combined entity will slash costs to the bone and pray that oil prices have peaked, because without new car sales, even the combined earnings model won't come to fruition. The simple truth is that there aren't enough subscribers to keep satellite radio going for very much longer.

If I were XM and Sirius, I'd plan to sell air time for ads just like every other radio station. They desperately need the extra revenue because, in this weakening economy, I can tell you that it makes no sense for subscribers to keep paying their satellite radio bill if they can't even afford to put gas in the car that's playing it. But that would kill the differentiation between satellite and terrestrial, you say? It's tough being a company that's struggling to survive. Now go sell your shares before you lose your shirts.