cos10000

Goldman's Sirius Call: Solid Thesis, Poor Timing

For those who have staked substantial sums on the fortunes of these money-losing, high-tech distributors of third-party content, I hope your faith is stronger and deeper than your knowledge of industry dynamics.

Just read the headlines: GM sales fell 19 percent, Ford was down 28 percent and Toyota dropped 21 percent in June over the same period a year ago.

Starbucks is shuttering 600 stores over declining sales.

Who buys satellite radio subscriptions, gentlemen? The same people who buy new cars and frappuccinos.

The writing is on the wall, folks. If these stocks outperform the market, it will be through luck and circumstance, and not through any insightful epiphany on your part.

My hunch is that even if the stocks pop, you won't sell. You'll ride it all the way back down because you'll be consumed by the illusion that they're headed higher.

That will be the inevitable consequence of not being to identify, articulate, and justify your sell price. Pity the E-Traders out there, they're all the same. I'm glad they don't manage my portfolios.

Your disappointment will be palpable if the FCC approves (unlikely now before September) and the stocks don't move much.

There is more downside coming. Are you sure that of all the publicly traded companies and mutual funds accessible to you, that these unprofitable satellite radio companies are really going to give you the best possible return for the level of risk you're assuming?

Goldman's Sirius Call: Solid Thesis, Poor Timing

Kill and Cos, do you think Warren Buffett goes to message boards and posts cheerleading rhetoric such as "run dog, run"?

Goldman's Sirius Call: Solid Thesis, Poor Timing

Moderator, you make a good point about the monthly fees, and the salaries of Stern and execs. Let me add to those words of caution the fact that Sirius shareholders face substantial potential dilution the higher the share price goes. Additionally, I find it difficult to believe that any company in this space will be able to find 40 million more subscribers within 10 years on top of the 17 million that exist now.

The notion that they will assumes a perfection scenario that is, in The Vicar's humble opinion, wildly optimistic.

Goldman's Sirius Call: Solid Thesis, Poor Timing

WFC is actually a shill for Mel Karmazin, to defend this financially struggling company. I just had my source confirm WFC's IP address. It's sad that these desperate apologists for satellite radio are allowed to impose their misguided political agendas on message boards such as Seeking Alpha.

Goldman's Sirius Call: Solid Thesis, Poor Timing

WFC: if The Vicar is actually the author's own alter-ego, as you shallowly claim in your prior post, then why has The Vicar made a number of enlightening and thought-provoking posts prior to the advent of the author's article?

Goldman's Sirius Call: Solid Thesis, Poor Timing

WFC - both The Vicar and the author may have inflated egos, but we are also more successful investors than you are.

Goldman's Sirius Call: Solid Thesis, Poor Timing

WFC, like so many others on these boards, you draw your conslusion first, then you selectively cite facts that support it. This kind of thinking is what prompts investors such as yourself to lose money. It is why you will realize an average annual return of 4%. You simply don't think critically and objectively enough.

The Vicar of Value is of independent mind, with no business or financial ties to the author, to the NAB, or to either satellite radio company. He holds no position in either, and does not seek to due to the high opportunity costs associated with investing in unprofitable satellite radio companies.

Goldman's Sirius Call: Solid Thesis, Poor Timing

If any of the satrad cheerlesders on these boards can honestly say they have read the 10-Ks of both companies, and have researched the industry fundamentals thoroughly, please acknowledge your accomplishment by stating so.

Goldman's Sirius Call: Solid Thesis, Poor Timing

User 219292 -- Do you really think your own thinking is "unbiased"? Or is the writer "biased" because he's the healthy voice of dissent who doesn't get mired in the flawed thinking and cheerleader mentality of these message boards?

Goldman's Sirius Call: Solid Thesis, Poor Timing

I applaud this author. A true voice of rationality and knowledge in a sea of empty rhetoric.

He says out loud what most of the desperate believers on these message boards will never admit. The satellite radio stocks have practically no upside from their current levels, and there are simply too many more attractive investment opportunities out there.

This is not arrogance. It is a simple acknowledgement of the economic and business realities of satellite radio.

Both companies have leveraged themselves beyond the point of redemption, overspent carelessly on advertising and talent, and have generally overextended their cost structures while making wildly optimistic assumptions about subscriber growth, retention, and profitability.

Even the airlines and wireless providers (also with high debt levels) know enough to create programs that will retain customers, such as frequent flier programs and 2-year contracts. The satrad companies have built no exit barriers into their business models, while taking all future growth on consumers' proclivity to buy a new car. With the credit markets locked, and fuel at $4.50 a gallon, it doesn't take much to connect the dots to satrad's dark and grim future.

To those of you who are long, it is not too late to save face and sell. But the longer you cling to your flimsy hopes and wishful thinking, the more it is going to cost you.