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Lehman, JP Morgan Weigh in on Newly-Formed Sirius XM Radio

"Profanity is the weapon of the ugly, the ignorant, the impotent, and the powerless."

-The Vicar of Value

Lehman, JP Morgan Weigh in on Newly-Formed Sirius XM Radio

The Vicar is doing his best to catch up on outstanding requests.

I do not have a long or short position in Sirius. I have no position, and never had a position. I do not plan to take a position. If I ever invest in this company, I would buy the convertible bonds. They have a much more favorable risk-reward profile than the common equity shares.

The Vicar does not work for Vanguard. However, he does own VTSMX and its corresponding exchange-traded fund VTI. Being indexes, both are convenient benchmarks for evaluating the performance of other equity investments. The Vicar did so here to highlight the fact that a "boring" mutual fund better serves the individual investor's goals than speculative companies driven by media hype, with no track record of profitability.

The Vicar discusses these companies thoroughly, as he is quite familiar with them, but he is selective regarding the level of granularity he applies when discussing company details. He does employ quantitative metrics to strengthen his arguments when and where appropriate.

Additional questions?

Lehman, JP Morgan Weigh in on Newly-Formed Sirius XM Radio

veryserious, you also bear responsibility for blindly following Internet cheerleaders who make optimistic posts on message boards, while passing themselves off as satellite radio experts. Mr. Savery is well intentioned, but all he does is parrot sell-side Wall Street research. He offers no real insight.

Lehman, JP Morgan Weigh in on Newly-Formed Sirius XM Radio

163888 I'll reiterate for those who did not hear me clearly the first time.

There is little to no upside for this stock. The convertibles pay 6% to holders right now, with nearly 1:1 upside participation in the unlikely event that the stock outperforms. There is simply no appeal to owning the equity shares of this company, as they have a relatively unfavorable risk-reward profile.

You'll make more money with Vanguard's Total Stock Market Index Fund (VTSMX). Let's say you purchased $5,000 each of Sirius Satellite Radio and Vanguard's Total Stock Market Index Fund three years ago today, August 6, 2005.

Your $5,000 in Sirius today would be worth $1,072 today, a decline of 80% in value. Sirius was $6.76/share on that date. Transaction costs would make your loss even more painful.

Your $5,000 in VTSMX, a passively managed, well-diversified index fund with a low expense ratio, would be worth more than $5,600, a holding period gain of 13%, dividends included.

You would be $4,500 richer today if you had bought VTSMX three years ago than Sirius.

Factor in the potential dilution from stock options, and even if the company eventually becomes profitable, the only investors who will make money will be the bondholders. This is a fixed-income play. No wonder the institutional money is avoiding this stock.

Individual investors such as yourselves who are breathlessly waiting by the fireplace for Santa Sirius to come shimmying down with a shiny capital gain in his bag are in for a disappointment.

If professional buyside portfolio managers won't invest their clients' money in the shares of this unprofitable and risky company, why should you invest your own?

Lehman, JP Morgan Weigh in on Newly-Formed Sirius XM Radio

163..only because I say what you don't want to believe.

Remember, if God didn't exist, man would have to invent him.

Lehman, JP Morgan Weigh in on Newly-Formed Sirius XM Radio

UHuh! Do you know what fiundamentally drives a stock price? Cash profits. All the flashy lights and technology are wonderful and exciting, but if the company can't make a dime (as both satrad companies have not) the stock will inevitably languish. Are you sure this is the best possible investment opportunity out there given the level of risk you're assuming by owning the shares of this money-losing company?

Sirius Stock Up as CEO Buys Two Million Shares

I'm not slamming this stock. I'm only conveying the facts. Do you have misgivings about your position?

Sirius Stock Up as CEO Buys Two Million Shares

Mr. Karmazin's total 2006 Sirius pay package exceeded $31 million. Given that, and his substnatial net worth, I would compare him buying 2 million Sirius shares to any of you buying 200 Sirius shares. It's enough to impress individual shareholders, but this is a drop in the bucket to Mr. Karmazin, and definitely not enough to impress institutional portfolio managers, who are still avoiding this stock. It's likely done for appearance reasons. But don't let that stop you. Go ahead. Dive in. If Mel's doing it, it must be okay, right?

Sirius XM Show or Tell - A Rebuttal

Now that I know more about your habits and personal pursuits, I realize now that you aren't even in my league, babe.

Sirius XM Show or Tell - A Rebuttal

Killer, your sarcasm and bitter invective directed at me is just an admission that you know what i say to be true, but you lack the vocabulary, insight, and articulation to admit it, or to acknowledge my own.

Besides, you know the difference between a Harley and a Hoover? The position of the dirtbag.

Sirius Stock Up as CEO Buys Two Million Shares

Mel Karmazin is not taking a risk by ponying up to buy shares. There's more at work here than the simple story that he's purchasing shares on the open market. All in the fine print. Read the proxy.

Sirius XM Show or Tell - A Rebuttal

Correction - 2 million shares @ $1.37 for total beneficial ownership of 8.5 million.

Sirius XM Show or Tell - A Rebuttal

He just bought 2 million shares for about $8.5 million.

Sirius XM Show or Tell - A Rebuttal

I never questioned the nickname you gave me -VicDave.

Sirius XM Show or Tell - A Rebuttal

Tech man you believe what you want to believe. Accept diversity in its many forms.