Barclay’s Calls Investment Strategy on Sirius XM Bonds
Barclays analyst Venu Krishna CFA, has published a report on Sirius XM centering on the financial performance of the company and more specifically an investment strategy revolving around the Bonds.
Krishna states, “Over the last few months, Sirius (SIRI) has lowered its near-term credit risk substantially as a result of a number of refinancing transactions whereby the company has pushed BCI, New York back almost all of its maturities in ’09 &’10 to 2013. As a part of this process, it also issued preferred stock in the company to Liberty Media (LMDIA) which converts to a 40% stake in SIRI on a fully diluted basis.”
Krishna feels that the main motivation for the Liberty deal is most likely the $2.6bn in deferred tax assets at SIRI on account of its accumulated losses which can only be monetized if SIRI remains a going concern. This fact in Krishna’s opinion provides a liquidity backstop for Sirius XM because Liberty will want to protect that benefit. According to the analyst, this gives Sirius XM a three year cushion which just happens to be the minimum waiting period for Liberty (under the Internal Revenue Code) before it can materially increase its stake in SIRI.
Based on these factors Barclay’s is positive on the credit over the next three years. They are more cautious in the longer term, but their suggested bond play has a good three years for investors to capitalize on.
Barclay’s recommends going long the 3.25% 2011 SIRI Convertible Bonds as there is no other debt coming due before this convert at the SIRI holdco level and it matures before the three-year LMDIA testing period expires
Position: Long Sirius XM Radio
F the big money bond holders. What about the average common shareholder? Hmm? Huh? 🙂
Is he any relation to Harry?
Interesting . . I guess then they are implicitly recommending a short-hedge against the common. Nice.
We’re gonna need PFCF pronto to pay-off some of this debt with COH(no more refi) or else Mel’s new round of options will also expire worthless . . .
Great. The pain continues then. Is there NO hope for us long suffering longs? I’m REALLY getting tired of this. You’d think I’d be used to it by now. Lol. It comes in waves. Right now I’m in another “fed up” phase. 🙂
Even tho I successfully averaged down from $6.50 to just under a buck…I am still alittle more than a double from just breaking even. Which at this point I’d take and run like the wind after nearly 4 years of pain.
Argh!
I’m in the exact same boat with you. Just let me get back even and I’m AMF on this POS. Amen.
BTW
“Break Even”, for ‘us’:
this happened twice before over the last two months if I’m not mistaken, in the pre-market trading, where we broke through the 60-64 cents barrier, and where today for the LIFE of me I don’t know why I did not sell it all once, but twice…………………..would’ve had 1/2 a million shares by now……….if I had decided, as I’ve/You’ve done by default…………….wanna go ‘long’…………………..
“DAMMIT”………….IMHO………….. dumb for not doing this !!!
Tyler,
No offense intended here.
Please learn how to properly structure a sentence.
Also, please learn how to use proper punctuation.
For someone who is supposed to be a professional writer, having such a poor grasp on the proper use of a comma is shameful.
bahbah…..
Articlles such as this are using excerpts from the report. I leave the language as close as possible to what was contained in the actual report so as not to change the intent. I am sorry if you do not like the writing style of the analyst.
??
!!
Hey boo boo….I thought this stock was supposed to drop to .35????
not only is boo/booey an innamedrone…as per Howard Cosell,he is probally a couple of innamedrones….get a grip/life…try,you can do it…or just get a puppy/puppys
Learn how to spell.
Bah bah…
I know how to spell. Typos happen. N particular on the little keyboard of a blackberry.
Why don’t you learn a bit of courtesy and respect? Or is being an ass an inherited quality that you can’t help? 🙂
you guys moderate why not moderate those out the door- whom tell you how to spelle and speek?
Tyler,
The spelling comment was NOT meant for you.
If you read the thread properly, it was directed at Kevin.
Personally, I didnt think that the analyst said anything that wasnt already common knowledge. The fact is, if Sirius, or Mel in this case, comes up with a winning business plan, the stock will in time do well. I continue to view Sirius as Amazon back in the day.
As for leveraging down, I applaud that. I was doing that also, but grew weary of the process. So I sold to realize the losses, waited 31 or 32 days to buy back in and avoid the wash sale rules, and lowered my basis and ended up with more shares at .13 each. I just want it to hit $3.00 to get back my money in my trading account.
More important is avoiding the reverse split. That is to me of greater concern. If Mel does that, then I, as big a supporter of Mel as you will find, will finally say Mel is screwing the common shareholders. You know what will happen if the reverse split is ever completed: the shorts will come out like locusts and short this stock to death. I think at that point, I would be one of them, and I have never shorted a stock in my life.
So take it with a grain of salt when one of these “analysts” issues a press release. Keep in mind that they are, in many cases, just trying to justify thier existance. That seems to be the case here.
What is everyone reading here? this report from this analysts is not saying to short the bond in 2011,but rather it is safe to go Long and buy stock now to protect it ,because their is a 3 year window before Liberty will act on any intention they have with SXM..and no other debt due till 2013….This is a very positive report….Good article Tyler and find also..
Tyler,
When was thisreport published and what does it mean for the stock in the short & long-term ?
Unfortunately, this stock will not move forward until Goldman gives the thumbs up.
I don’t think too many people on this site have a problem with Tyler’s writing skills, or his spelling prowess. What I AM SURE OF is that MOST everybody who logs on to Sirius Buzz is sick and tired of your incessant bashing of Sirius/XM, your personal insults, and your inability to tolerate other posters viewpoints….. without acting like a complete asshole.
If you hate satellite radio so much, and feel the technology and the company are doomed – as you claim – why don’t you take all your pent up angst and direct it someplace where it can be of some benefit? You are nothing but a cancer as far as I’m concerned; the sooner you are cut out and removed, the better it will be for all concerned. There is something to be said for manners and civility – two attributes that you, mr. Booey, are obviously not familiar with.
Steve O,
I do not bash Sirius-XM.
I am a subscriber and enjoy the service.
However, there are many decisions by management that I believe are foolish.
There are also serious problems with Sirius-XM customer service.
If all you want are cheerleaders here, so be it.
The owners of this site could EASILY require registration and completely moderate this group.
The fact that they haven’t clearly shows that they want and expect a wide array of opinions.
Part of that should be the logical conclusion that some posts might actually offend someone.
Sorry, but you do not have a right to not be offended.
What you seem to have also missed is that my predictions have been spot on lately.
If you don’t like my posts, here’s a solution.
Don’t read or respond to them.
Boo boo…you are so silly. I for one am going to nominate you for the number one internet troll. You have it perfected. Everyone has their talents and you have found your niche buddy!
The formula is real simple…Start making money. Everything will fall into place.
They are real close!
BahBah Booey,
I read your reply, and I have to admit that I actually agree with everything you said. There is a difference between bashing ….. and constructive criticism. I apologize for the disparaging remarks I made about you; I am a hypocrite and it appears the intolerant one is, in fact, myself.
Anybody who is a subscriber AND believes that managements decisions are foolish is ok in my book. I will read your posts more carefully in the future, and try to refrain from knee jerk reactions the likes of which you witnessed today. I am embarrassed and ashamed by my behavior, and I will not be so quick to judge and criticize from this point on.
Steve:
What a turn-around that was! While Bah-bah is right on target with his contrarian point of view……..and hence you are partially justified in your reply back.
You however, seem to have forgotten that he does appear to ‘lack manners and civility’ at times.
Choosing to try and denigrate a person’s academic prowess based on syntax, or even grammatical/spelling errors, when and if he wants to, or does not like their “opinions”…………………………
I would not have been so quick to offer up so much remorse…………………………..
Draland,
Your point is well taken.
A little constructive criticism never hurt anyone.
I will strive to be more civil and less antagonistic here.
I went to Verizon today. I asked them if I could purchase Blackberry with Sirius. To my disappointment, He said this:
1. Internet radio is better that Sirius satelite radio.
2. That I can get the same programs on internet radio without sirius.
3. That Internet radio, Pandora and Slacker are better than Sirius Radio.
Now I don’t know anything about Slacker, Pandora or Internet radio. But I do know about Sirius.
Did this guy know what he was talking about. He was obviously trying to sell the Blackberry phone that had features similar to the Apple phone.
I am long Sirius and wasn’t happy about what he told me and what he is telling everyone else.
Can anyone out there who is not short on Sirius explain all the difference between all these media streams?
Needless to say, I left feeling disappointed, because he went on to say that the Blackberry didn’t need satelite radio!
My next visit will be to the Apple store to get an Iphone.
DRALAND:
I agree with you; that was quite a 180 I suppose – I normally would lash out and debate almost any reply that rebuts my opinion. I guess I am trying to practice what I preach. I think that we are all fed up at this point and I do not want to – out of frustration – contribute to the escalation of personal attacks on fellow posters; hence my reversal. I guess it comes down to the old adage “If you want respect, you have to give respect.”
Saunders,
What would you expect him to say? Everyone knows sirius is much better. The combination of content and music is untouchable.
You’re right!
I plan to purchase an Iphone this week.
should i sell my 900,000 shares that i bought of sirius.Ipaid 0.34 cents.how do you think that they will report on the 6th