clu.invesment

Sirius XM Recovers the Ball

Good article Brandon. I Believe next week will be a great week for share holders lots of VERY positive gossip out there Mel will deliver From Investor Village "Mel said "After Labor Day"
Mel is a great champion and defender of the Sirius brand. IMHO he will grow this company faster than GS can imagine. Hearing rumors about Mel communicating his plan after labor day.

Premium content sharing between SIRI and XM e.g. $16M+ additional annual revenue just from XM Stern subscribers
New hardware dual band, content specific, ?
Video
Synergies Progress Update and Date Certain
Additional Synergies in tens of $M"
CITI Buy SIRI - The stock has been hurt by the difficult macro backdrop and auto production slowdown; however, I believe SIRI is massively undervalued as investors fail to appreciate the size of merger synergies, the opportunity for top line improvement with new plans and the benefits of greater OEM penetration.
Value is in the Content - Reports of a new internet streaming application that would allow SIRI users to get content on their iPhones and other portable devices are now emerging and highlight that SIRI’s value lies in its content and not its hardware or infrastructure.

Sirius XM Belt Tightening Begins

SIRI stock price will move higher by weeks end ahead of Conference call next week. I suspect a close above $1.40 and a real move above $1.50 next week.

GM's Discount Promotion Could Boost Satellite Radio Subscription Numbers

Just spoke with my Broker at Smith Barney who suspects Jim Cramer is trying to help out a hedge fund holding a large short position in SIRI

Loading Up for Some Sirius Gains

OUR GOLDMAN SOURCE SAYS THEY COVERED 27M SHORT SHARES LAST WEEK

Also: Traders Desk e-mail message

XM and Sirius previously traded hugely over-valued, when compared to their Book Value (P/B Ratio). Sirius, for example, had a book value of ($0.56), while they traded at $2; while XM’s was ($3.43) and they traded at $10.The current Pro-Forma Book Value is approximately $1.62 — and the stock is trading at $1.46. In other words, it is undervalued… for the first time ever. I wonder how many on the Street actually looked at the Pro-Forma condensed financials of the company filed last week? Given the fact that the Street had routinely overvalued this sector as individual companies — the fact that is undervalued as a merged company is interesting. Interesting because, if they can demonstrate some of what they’re claiming… then this undervaluation will likely correct quickly.

Last Friday I coverd a large short position and added a long position in SIRI I expect stock will see a Earnings run up this week to $1.75 range to $2 possible & I expect the stock will trade around 1.5x Book value before years end around $2.50 to $3 a share.

Watch for UBS to upgrade SIRI they did the deal & are buying on the open market Friday they crossed in 2 large blocks 9.7M & 7.6M.

Loading Up for Some Sirius Gains

Exact Analyst note from Merrill Lynch Website

Merrill notes :Modest subscriber upside; revenues in-line
Retail net adds of 33.6k improved from 1Q08 net adds of just 2.5k and above our
6.5k estimate. Improvement in retail and an increase in the conversion rate to
48% from 47% in 1Q08 are encouraging signs that consumer adoption of satellite
radio remains strong even as the subscriber base expands into more mainstream
demographics/incomes. Sirius’ self-pay churn of 1.6% improved from 2.1% in
1Q08 and was slightly better than XM’s 1.67% 2Q08 self-pay churn. 246k OEM
net adds were 3.5% below our estimate and reflect the weakening U.S. auto
sector. With penetration in new auto production projected to climb to ~70% in
2009 (from ~50% in 2008), we expect the OEM channel to re-accelerate.
SAC improvement drives EBITDA upside
Revenues in-line with our estimate at $283mn (+25% Y/Y), but SIRI held costs flat
Y/Y (versus our 4% projected growth), yielding a projected EBITDA loss of just
$24mn, versus our projected $35mn EBITDA loss and 1Q08 loss of $39mn. 25%
subscriber and revenue growth with 0% cost growth reflects SAC improvement
and the high operating leverage of the satellite radio model, with 70% contribution
margin from new subs. Sirius alone is quickly approaching EBITDA breakeven,
and merger synergies with XM should accelerate EBITDA and FCF growth.
Wrapping up XM merger details
XM announced a $550mn offering of Senior Subordinated Notes due 2014, which
will be exchangeable into Sirius stock. Concurrently with the Notes offering, Sirius
commenced an equity offering to facilitate hedging the new Notes. Sirius will not
receive proceeds from new shares ($375mn initially and up to $65mn additional
shares), except a nominal loan fee. Because the borrowed shares must be
returned to Sirius upon maturity of the Notes, they will not be considered
outstanding for accounting purposes and will not be included in EPS calculations.
Investment summary
Strong operating leverage and high contribution from new subs should drive an
acceleration in EBITDA and FCF. Improving trends in retail and improving
conversion rates in the OEM channel should allow Sirius/XM to capitalize on the
more widespread availability of satellite radio in the ~245mn U.S. auto fleet. We
reiterate our Buy rating and $4.50 price objective for the combined Sirius-XM.

MY ADVICE DON'T BE TRICKED INTO SELLING BUY AS MUCH AS YOU CAN THIS WILL MOVE UP BACK OVER $2 SOON.

Loading Up for Some Sirius Gains

My GS broker friend told me to take advantage of the current stock price. He bought last week for his personal account, and he doesn't expect it will stay this cheap. He was very happy to be able to buy at such a discount and even sold other positions to buy.

He's also expecting Mel will give investors some very encouraging news this week. He believes the share price will move back over $2 after the earnings report and says smart shorts will cover ahead of earnings.


Investment club member highlights:
"Mel has always under promised and over
delivered on his forecasts since he
joined Sirius. You can bet if he said
400m in Synergies in 2009 , it will
be at least 500m to 600m !!!
Sirius doesn't
have to refinance any debt for years.
2.0 Billion of the long term debt is not
even due for over 5 YEARS and by that
time the Markets will probably have
recovered and more reasonable financing
would be available.

Retail
subscribers slowed because the merger
was in limbo for 17 months !!! Last
QTR Sirius/XM added over 2.0 Million
in NEW OEM gross adds. Even through
car sales are way down Sirius and XM
both had record new OEM adds because
the OEMS percentage wise are installing
more Satellite Radios with penetration
rates over 70% for the 2009 model year.

Sirius and
XM have an excellent pool of management
talent and the combination of the
new company will allow them to take the
management talent from both companies
and retain the best employees after
synergies.

Sirius has gone from 100k subscribers
and revenue of $67M in 2004 . To 18.5
Million subscribers and $2.2 Billion
in annualized revenue over a 4 year period."

Analysts Note Latest Satellite Radio Merger Angles

*7/14/2008 Top Traders Pick XMSR* Added Note:

7/14/2008 Top Traders Pick: XM SATELLITE RADIO(NasdaqGS: XMSR)Rated NEW 'Strong Buy' Current price $7.81

Note: XMSR is trading at a huge discount based on the SIRI/XMSR merger share holders will end up with 4.6 shares of SIRI for every 1 share of XMSR and SIRI has a current share price of $2.13 x 4.6 = $9.79 per share instant value for XMSR share holders. XMSR stock is 25% undervalued compared to SIRI share price.

Added Note: Buying XMSR at current $7.81 is the same as buying SIRI at $1.70 per share as $1.70 x 4.6 = $7.82 per share.


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Disclaimer: The information provided above is believed to be accurate. We do not give investment advice, nor do we at any time manage or direct the funds of any person or company other than our own. Positions contained in this report are our own personal ideas and thoughts and are not intended as trading advice for readers. This report is issued solely for informational and entertainment purposes and content is not to be construed as being an offer to sell or a solicitation to buy any security.

Analysts Note Latest Satellite Radio Merger Angles

It would be smart to SHORT SIRI & BUY XMSR based on the arbitration gap XMSR is currently worth $9.79 Per share with SIRI at $2.13 anyone short XM would get hurt right off the bat on merger approval & I expect this week the deal gets done.