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  • Sirius XM Set To Resume Share Buybacks [View article]
    CN,

    I don't know if they've started again or not, but on March 14th they issued a PR after the offer was withdrawn that said they "intended" to resume the buybacks, along with reaffirming guidance. So they had a couple of weeks in the 1st Q where it could have happened. I think the constraint involving the Liberty buyback program was lifted when the formed Holdco - again it was the Liberty offer just after that that prevented them from resuming in January.

    Honestly, I hope we find they haven't resumed the buybacks yet - sure hasn't helped the stock if they have. Resumed or not, its only about 1 month since the offer was withdrawn, so doubt if much has been done - and its not clear when they decide to invoke the "period before earnings" as a reason to halt purchases, if they still do.
    Apr 19 01:32 PM | Likes Like |Link to Comment
  • Sirius XM Set To Resume Share Buybacks [View article]
    CN,

    Not sure the 2022 debt thing stopped open market purchases, but perhaps placed limitations on the ability to do the full $2 billion of the second installment. I believe we may find on Thursday that Sirius has been doing open market purchases since the Liberty offer was withdrawn, on a limited basis. However, given the share price it sure doesn't feel like they have been buying back shares aggressively.

    One reason Sirius management may have been caught off guard with the 2022 debt restrictions, which they likely had plans to resolve, is they did not have much time to respond to Liberty's share buyback proposal back in October - and had to suspend open market purchases at that time. I'd put the blame right at the foot of Maffei and Malone - not Sirius management.

    Forming Holdco, which they had been planning for some time, solved some short term issues and allowed them to borrow more from the revolver, but the 2022 debt covenants apparently placed additional restrictions on larger buybacks that took more time to resolve.

    Having formed Holdco, I believe that Sirius management was ready to resume open market purchases in January when they were again hit with a surprise from M&M - the offer that put all buybacks on hold.

    I'm not one to defend the execution of the share buyback program, but M&M have has much to do with the start-stop nature of it than Sirius management. I'd congratulate them on executing a terrific buyback arrangement at the time that Sirius was nearing $4, just before they knew that Sirius was going to report a weak quarter, reduced guidance, and need to suspend open market purchases as a result of their arrangement to sell $500 million at a fixed price.

    While some of us understood those open market purchases were being suspended, the wording was such that many shareholders did not believe it until they reported 4th Q results, revealed no open market purchases and issued that weak guidance.
    Apr 19 11:45 AM | Likes Like |Link to Comment
  • Sirius XM: When Does This 'Thing' Get Out Of The Mud? [View article]
    SF,

    "We are all but renters"

    Yes, but you tend to get a lot more short term renters buying for the wrong reason with an offer like Malone's that many commentators suggested would be sweetened, rather than withdrawn as some of us predicted. Perhaps I should have qualified the comment.
    Apr 7 08:18 PM | Likes Like |Link to Comment
  • Sirius XM: When Does This 'Thing' Get Out Of The Mud? [View article]
    Seattle,

    The Liberty offer not only brought in the arbs buying Sirius and selling LMCA that was reversed when the offer was withdrawn, it also brought in renters that expected another pop when Malone improved the offer. All became sellers of Sirius when the offer was withdrawn - causing to break support in the 3.30s and a lot of technical damage.

    Without the offer, Sirius likely would have experienced some selling when it provided guidance the first week in January, but I understand they were prepared to resume buybacks in the open market at that time because Holdco had solved the problem they had of increasing debt, including the revolver, that would allowed them to continue with the Liberty buyback and open market purchases simultaneously (the reason those open market purchases were suspended in October). An offer that had no chance of ever being accepted.

    So the Malone offer did a lot of damage, not only for the reasons above, but because it increases the uncertainty in Sirius while all await the next scheme he dreams up. This from the mind of a genius?
    Apr 7 07:07 PM | 3 Likes Like |Link to Comment
  • Is Telematics A Sirius Mistake? [View article]
    CN,

    Yeah, I was aware of Mel's interest in this idea. There are the issues you raised, but they are all solvable. After all, they were able to add some Hispanic channels - improving codec is always making better use of bandwidth; XM once upon a time had advertising on music in their business model. I think Mel would do it. It is just out of Meyer wheel base. Not that he couldn't hire someone to do it for him, but he didn't grow up in the radio broadcasting business like Mel.

    Great they are going after used cars, but it still leaves millions of radios not generating revenue it is a wasting asset, like a fast food restaurant that doesn't open until 11 am.
    Apr 7 05:17 PM | 1 Like Like |Link to Comment
  • Is Telematics A Sirius Mistake? [View article]
    Tiger,

    I doubt you have SiriusXM navigation. You may have SiriusXM traffic integrated with navigation, as well as SiriusXM point of interest information integrated with Navigation. I once had those when they came with the car, but those extra services expired after 2 years, and I didn't find value (still have navigation that has nothing to do with Sirius). It's all good stuff if you want to pay extra for it, but nothing to do with them spending $500 million for the acquisition.
    Apr 7 04:46 PM | 1 Like Like |Link to Comment
  • Is Telematics A Sirius Mistake? [View article]
    CN,

    I don't think Mel would have done the telematics acquisition. He repeatedly said they would do an acquisition if they saw one that was attractive. This one had been around for years and he did not do it.

    One way I believe Sirius could grow revenue and profits substantially is to offer 5-6 channels with a completely different brand than Sirius or XM or SiriusXM, and introduce advertising on them. As we are often reminded Sirius already competes with free terrestrial. No reason to expect that Sirius would lose subscribers that pay to not listen to commercials on SiriusXM music channels, or the non-music content they pay for. If a couple of those channels were Hispanic, might be a way to generate revenue in the Hispanic market as well. No one has 5-6 advertising based channels in every market in the U.S.. Lots of potential for all those deactivated radios that generate zero revenue today, and are unlikely to ever generate revenue if they rely solely on the subscription model.

    However, it would be essential to rebrand these channels to separate them from the subscription model used by SiriusXM. Music genres would be more redundant, probably similar to those offered by terrestrial, probably less advertising than terrestrial, but enough commercials to keep subscribers from bailing, and provide additional profits. Major competitive advantage compared to terrestrial would be in reception and coverage.

    Mel would have been the perfect CEO to implement this, but Malone pretty much made sure that was never to be. Meyer wouldn't have a clue - he's into telematics.
    Apr 7 04:22 PM | 3 Likes Like |Link to Comment
  • Sirius XM: When Does This 'Thing' Get Out Of The Mud? [View article]

    SF,

    Regarding the share buyback, I believe Holdco resolved the issue of Sirius buying back shares in the open market and they likely would have restarted in early January after the guidance announcement had it not been for the Liberty offer and the hold on all buybacks. They may be in the open market now, even though we haven't seen a Form 4 from Liberty indicating they have completed their sell back to Sirius.

    I agree that the Liberty offer, with arbitraging, added to selling pressure after it was withdrawn, but it also probably brought in a lot of renters, expecting a bigger pop if the Liberty offer was improved. All bailed after the Liberty offer was withdrawn. Now Sirius is under pressure mainly because of the Nasdaq. When that ends, who knows.

    Liberty's timing, beginning with the share repurchase agreement in October, has been pretty bad for Sirius shareholders. Doesn't appear its been all that good for LMCA shareholders either.
    Apr 7 01:24 PM | Likes Like |Link to Comment
  • Sirius Drifts Lower Despite Upgrades [View article]
    CN,

    I was aware of your strategy with covered calls, but did not remember the specific trade. With a net cost of $3.25, I'd assume you'd expect it to be higher than $3.39 by year end. Looks like your trade would cost about $3.18 today. Better than paying $3.68 and being down 29 cents.
    Mar 19 11:14 AM | Likes Like |Link to Comment
  • Sirius Drifts Lower Despite Upgrades [View article]
    CN,

    I would have thought the arb play was unwound on Friday too, but today Sirius and Charter were down and Liberty up - so maybe be some lingering arbs, but doubt it.

    I asked you a question the other day and not sure if you saw it. Given that you are long and have sold covered $4 calls, that would suggest you believe the stock is worth more than it is trading at today, but somewhere less than $4.

    So what do you believe is fair value is now, and in, say, 6 months?

    Tougher question - what's it going to take to get the stock above $3.50. Starting to look like substantial resistance.

    I'm repeating recent comments, but given how low expectations seem to be, the 1st Q may provide a small beat on expectations (maybe not great, but better than expectations). Unfortunately those results won't be available for another 5 weeks or so, and low expectations and a dropping stock price may bring on more selling.

    If Sirius doesn't restart open market purchases at these levels (only a few pennies above the average where they bought in the 2nd Q and well below where they bought in the 3rd) that starts making it look like they believe its overvalued now despite the earlier purchases at higher prices (the average of the whole first $2 million if you include Liberty, and maybe even if you don't - too lazy to calculate).

    I don't believe they think their stock is overvalued, but they probably need to start the open market purchases soon or the market might start to question why not.
    Mar 19 01:31 AM | Likes Like |Link to Comment
  • Liberty Pulls Offer To Merge With Sirius Off The Table [View article]

    Sandman
    "I consider what Allen did at Ford genius bordering on prescience."

    It most likely came from the conservative nature of the Ford family, rather than Mulally. While they don't own a very large percentage of the company, they have voting shares that control 40%. With Ford, bankruptcy is never an option, because the family would lose control and the company. Since the days of the Whiz Kids, Ford's financial planning has been on the conservative side. It's been drilled into the heads of every CFO at Ford since then. That is the way the family wanted it, for their own protection. It is the difference between having a company controlled by owners (even if its a small percentage) vs. just hired help. Same probably applied to Lehman and lot of others.
    Mar 18 01:13 PM | Likes Like |Link to Comment
  • Liberty Pulls Offer To Merge With Sirius Off The Table [View article]
    SF,

    Openaccount seems to be completely oblivious to the 2008 financial crisis and what happened with mortgages. Bad analogy to explain why more debt is good.

    But it does seem you've entered the Openaccuont vortex.
    Mar 15 02:03 PM | Likes Like |Link to Comment
  • Liberty Pulls Offer To Merge With Sirius Off The Table [View article]
    CN,

    Its not just my comments that disappear, then reappear, then disappear, its others as well. Comments just don't seem to load consistently, and also get rearranged. This morning I did see my earlier comment and your reply.
    Mar 15 01:57 PM | Likes Like |Link to Comment
  • Liberty Pulls Offer To Merge With Sirius Off The Table [View article]
    CN,

    Sirius is using the revolver like it is cash. They didn't have it (but should have) in 2007/8/9. XM actually had one for a while. Mel, to his detriment, apparently did not like paying the points when the loan wasn't being used. His overconfidence on his ability to raise debt cost his shareholders dearly, but made him and Frear a lot of money when they gave themselves new stock options. Joan Lappin says Frear was the one in the room that turned down the loan offer in fall of 2008. Still don't understand how he kept his job, but probably he is a good tool for Maffei.

    Anyway, I'd like to think Maffei has a better handle on financing than Mel/Frear, as Liberty seemed to weather the 2008/9 crisis in good shape. Have to say, however, listening the Maffei talk about cash flow from financing, it is almost like he views it the same as cash flow from operations.

    Mel, like Malone, both successfully did a lot of debt financing back in the days to build empires. Mel got over confident, it seems, always believing money would be there if he needed it (he said as much in the summer of 2008). Maffei sounds the same way these days. So far he has been right, as was Mel, until he wasn't.

    I'd probably be a little more cautious as well, maybe like you, and raise the money now. I'm just pointing out what seems to be the mindset of Sirius /Liberty at this time. Most probably don't remember it, but the main reason Ford didn't need government financing wasn't because they had better vehicles than GM and Chrysler to get through 2008/9, it was because they raised funds ahead of it - not so much because they anticipated the severity of it, but just because they were more cautious with their balance sheet - in case it was severe.

    Given that Malone is a main shareholder in his companies, he probably is a little more like the Ford family - making sure shareholders are protected, and financing is available when needed. Mel and Frear, although shareholders, were mainly hired help, more like GM managers. Makes a difference in how a company views protecting shareholders, rather than themselves.

    He says as he babbles on . . . .
    Mar 15 01:49 PM | Likes Like |Link to Comment
  • Liberty Pulls Offer To Merge With Sirius Off The Table [View article]
    CN,

    SA has its problems with comments, at least the way a article comes up on my browser. Comments come and go. Sometimes I see them doubled. Sometimes replies don't match up with the initial comment. I still don't see the original comment, nor your reply. Also, this article did not show up on the SIRI Yahoo page, so I missed it initially. Surprised you hadn't written one, I went over to the LMCA page and found it there. Spencer's post yesterday was that way, but today his was on both LMCA and Yahoo.
    Mar 14 09:34 PM | Likes Like |Link to Comment
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