SIRIUS XM SATELLITE RADIO NEWS

I admit it. I am obsessed with Hurricane Gustav. I clearly remember the destruction and the loss of life of a few years ago. The destruction was not just physical. Families were torn apart, uprooted and many were further victimized following the largest natural disaster in U.S. history. No matter what you may feel about an individuals choice to live there, children who had no choice died.

Yesterday, SiriusXM issued a press release that they had activated the emergency channels on both Sirius 184 and XM 247. I thought an act of this magnitude was important enough to warrant an immediate posting of the company’s press release, as the potential to perhaps not only help save lives but to ease the burden of those being evacuated existed.

As I jumped into my car tonight to head out to the store, I decided to tune my own receiver to Sirius 184 to see exactly how satellite radio might benefit people, including myself and my family, in the event of an emergency. Continue Reading »

We have all heard Mel Karmazin state that more detail regarding Sirius XM Radio would be available after Labor Day. This left the window open for speculation, rumor, and simply stated, another period of time where Sirius XM radio stock could blow with whatever winds the marketmakers, a television host, or even an analyst wanted. Even hot tips whether accurate or not are difficult to prove one way or the other, leaving more frustration.

Sirius XM Radio is stuck. For sector followers this is nothing new. However, knowing it is stuck, and knowing that it is being traded in a range does not ease the frustration. For the past week the stock as bounced around a bit, but accomplished nothing. Longs and shorts are not seeing any real traction. The stock is stuck. How long it will remain in a channel is not yet known, but the next major activity is.

Labor Day is this Monday, and it is then that the company will begin to roll out more detail. This will be something that is hopefully more concrete. Something people can sink their teeth into, and something that will give the street a sense of direction with this equity.

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24/7 emergency channels on both SIRIUS and XM chart course and effects of storm, provide comprehensive evacuation, safety, weather and life-saving tips.

SIRIUS XM Radio announced today that both SIRIUS and XM Satellite Radio are broadcasting 24/7 comprehensive emergency news, weather, safety, evacuation, disaster recovery and traffic reports across multiple channels to help people across the country prepare for Hurricane Gustav, including channels dedicated to providing emergency evacuation information.

SIRIUS’ and XM’s emergency channels offer news, weather updates and safety tips for residents in affected areas and their loved ones, including updates from government officials and first responders such as the Red Cross, FEMA and other local officials and agencies; evacuation routes and plans including special instructions and information for senior citizens; local emergency aid phone numbers; in-depth analysis and details on the location and strength of the storm, with an explanation of the winds and pressure of the storm and its projected path and landfall expectations; comprehensive shelter information and location; safety tips on how to prepare for the storm; what to do if ordered to evacuate; what items to bring when evacuated and what items are needed to ride out the storm at home; and what to do with pets, boats and homes.

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There has been a lot of buzz regarding the short interest drop in Sirius XM shares of late. If you believe the NASDAQ, which would seem like a reasonable thing to do, you may be as quick as I was to come to the conclusion, that the number of shares shorted has declined by nearly a third.

Unfortunately, the numbers I feel, do not add up. Leading up to the merger there were nearly 160 million shares reported short on July 15th. That number ballooned to over 310 million on July 30th and then dropped to only 209 million shares on Aug 15th.

The problem that has been eating at me is that the stock itself has not behaved like a stock should have, if such massive short covering had actually occurred. In fact, the stock declined in this period, as it has subsequently done for the latter part of August. Continue Reading »

Maybe…Last nights SiriusBuzz Radio show may prove to have been very enlightening. During the show a certain gentleman called in making claims that he managed a hedge fund and was calling from the Caymans.

The caller claimed that he and other hedge fund managers had received instructions yesterday by “Jonesie” of Goldman Sachs to not only cover their short positions in Sirius XM but to now take “long” positions in the equity. As the host of last nights show and having participated in several others, I can attest that this person has not called into the show previously.

Certain statements he made were in fact backed up by the price action of the stock on the 28th. Also some mention was made of positive company news expected next week from Mel & Co..

I want to caution the reader that these statements may or may not be true. Only time will offer the answer as to their validity.  Buying stocks on such rumors can often lead to disaster as anyone could use the radio show to manipulate small retail investors. In fact I am writing this for the sole purpose of making that point clear as I have noticed the news of this call has now been leaked to message boards.

As one poster put it, you are either long, or you’re not. If you are long, and the information provided by the caller proves to be true, great! But beware, a rumor is not a reason to buy a stock. Fundamentals and Technicals are the only reasons. For those that missed the show, you can hear a replay at SiriusBuzz Radio. The call in question occurs at 34:30 into the show.

Position: Long SIRI, no position on GS

Just one week ago, I wrote a scathing article regarding Sirius XM and the NFL, titled Sirius XM Fumbles The Ball. Experience had led me to believe that a full marketing campaign would begin near the end of the season, as had seemingly been the case for several years now. The end result has usually resulted in an advertising campaign that came too late in the season to bring any real results to the bottom line. I admit I wanted to ignite a fire, and perhaps I did just that.

My opinion remains firm that not reaching out to the 35 million out-of-market NFL fans (not to mention the possibly larger pool of college football fans) would be inexcusable as it represents billions of dollars in potential revenue to the company. With the Labor Day weekend approaching and summer coming to a close, football season will begin its annual kickoff countdown. The final preseason NFL games begin in earnest tonight and the weekend itself promises a football fan’s dream lineup of college offerings.

A quick check of the games available on Sirius now reveals what may be a new marketing campaign in the works. The Sirius home page reveals a new version of the Sirius mascot (mongo) holding a football with the gridiron offerings taking center stage. The NFL page reveals new graphics touting “Every Game, Every Week, EVERYWHERE” along with a new contest called the straight up pigskin pick ‘em game which challenges listeners to beat the experts. There have also been sporadic reports of Sirius XM commercials being broadcast during last weeks preseason exhibitions. Continue Reading »

Like a thief in the night, holders of Sirius XM short positions are scrambling to cover. According to Satwaves.com, Sirius XM short interest has fallen 32.69% from 310,672,182 shares to 209,124,306 in only a 2 week period; a decrease of 101,547,876 shares.

A check of the NASDAQ market site verifies this information which brings the number of Sirius XM shares short to nearly the levels of the pre-merged stand-alone company. It would seem that the shorts are taking advantage of a suppressed stock price to cover, as the “upside” potential of a short position in Sirius XM has seemingly diminished.

With the knowledge of the recent loan of 168 million shares to short against the convertibles, it would seem that few true shorts remain.  A recent Reuters report on overall short interest indicates “that investors may think the worst of the market downturn may be over.”

With over 200 million short shares remaining, those that continue to hold positions short may find themselves at the losing end of any good news reports going forward, as very few others will be there to support their positions and risk fighting renewed strength from the buy side of the ledger.

Position: Long SIRI

As expected, Jim Cramer has come out again to bash Sirius XM and its shareholders, on the heels of three separate positive analysts reports this week that included Citigroup, Stifel Nicholas and Barrington Research.

In this latest attack, Jim may have finally opened himself up to a lawsuit, as he outright lies in some of his assertions, which I will explain. You can’t get sued for an opinion, but you can get not only sued but prosecuted for spreading false rumors about a company, which in my opinion, is just what Jim Cramer has done. Let’s highlight this statement of Jim Cramer:

“But more important, this quarter is a disaster for Sirius as is the next one because the deal came too late to salvage the Christmas retail selling season and the fall auto season. Missed ‘em both. Brutal.”

Breaking this down we can easily find all the flaws and fear mongering of this statement.  He claims this quarter will be a disaster for the company. In a way, that may hold true as there will probably be merger related costs that cut into Sirius XM earnings. That is of course only if the synergies announced do not materialize in time, and we can see that cost cutting continues to be a priority of the merged company. Continue Reading »

It would appear that one of the first casualties of the Sirius XM merger is AMTC, Applied Media Technologies Corporation. Great expectations had been placed on AMTC as the company enjoyed an exclusive relationship with Sirius as a stand alone company for many years, in the hopes of producing a high number of Sirius Music For Business subscriptions and helping Sirius to become a stronger competitor to Muzak.

A check of Sirius XM’s marketing partners no longer lists AMTC as a Sirius partner and AMTC’s website has also removed all of its Sirius links. A phone call to AMTC confirms that AMTC is no longer selling Sirius XM for business.

Recently, I had noticed that Sirius XM had added several other companies to their branding efforts including Dynamic Media, Info-Hold, and Turnkey Media Solutions. These three companies all offer both Sirius and XM business subscriptions, which differs from the Sirius only offering of AMTC. The XM music for business web page does not list any specific marketing partners.

The original numbers of the AMTC deal are buried in overall marketing costs on the company’s financials, so it is yet unknown as to how much this will save the company in terms of dollars. Although negotiations may be continuing between the two companies, it looks as though the line item cost reductions analysts have been expecting, have in fact begun.

Position: Long SIRI

Retail sales for satellite radio in July were still down on a year over year basis, but overall sales were better than most analysts were expecting. While Sirius and XM have now merged, the breakdown from NPD Group still outlines retail sales by brand. For July Sirius has virtually closed the retail gap, being down only 1% on a year over year basis. XM’s July was not very good, with the XM brand coming in at down 52% when compared to sales in 2007. Combined, the numbers fare much better with the sector being down 14%. Many analysts have been expecting a 30% drop in the retail channel. Stifel analyst Kit Spring is expecting a 25% drop in retail for Q3 2008, and carries a $3 price target on SIRI. The retail split was 70% for Sirius and 30% for XM.

While many feel that retail is not a major factor in SDARS, that sentiment will soon change. With A-La-Carte radios set to debut soon, the retail channel could pick back up, although the early adopters will likely be existing subscribers upgrading their receivers.

As the year continues to progress, and new receiver become available, the retail channel will be interesting to watch.

Position - Long SIRI