Konst

Sirius XM On the Rise - Does Microsoft Want a Piece?

sl62,
2005-2008 was a different situation. At that time it was a hype stock (like Rimm was 2 months ago). There were also some catalysts that people had high hopes for, such as signing Howard Stern.
Such catalysts are unlikely to come and it is no longer seen as a game-changing, paradigm-shifting blah blah blah company.

So, you are right that a stock can trade at a very high P/E multiples when it's hyped, but that time for Sirius is past. Most importantly, becaue it is not new anymore. So at this point, it's about earnings. But hey, I could be wrong.

As far as the price back then vs. now, it's also not comparing apples to oranges for another very important reason: significant share dilution from then to now.

Sirius XM On the Rise - Does Microsoft Want a Piece?

the price from 2005- 2008 is not that relevant to today's price. Most importantly, because management has been diluting shareholders the whole time. look at the market cap, not the price

Sirius XM On the Rise - Does Microsoft Want a Piece?

actually, may be the share price does NOT reflect that it's going bankrupt. Maybe 2.5 billion is only a slight discount to what this company is currently worth.

Sirius XM On the Rise - Does Microsoft Want a Piece?

Let's face the facts. The companys' share price reflects investors' notion that the company is going bankrupt. That is the risk. What is the potential reward? Hard to tell. Right now the company is worth 2.5 billlon, (and that's what's relevant not sub Dollar Tree share price). Their revenue is going to be about 2 billion, based on the recent past performance of the 2 comapnies. If the company starts turning a profit, they will probably make 10% profit on the revenue, based on somewhat similar businesses. That's 200,000 million a year. With a PE of 10 that would mean the company may be worth 2 billion, with a rather high PE of 20, it would be worth 4.00 billion. For the kids who can't do basic math and focus on the f--cking share price, that would warrant a price of 1 dollar and 12 cents, with a PE multiple of 20 and the ASSUMPTION that they are turning a profit. The big if is if they survive without filing for bankruptsy and wiping out all shareholders. How's that for sirius buzz?