Karmazin's Unsophisticated Remark

Who was Mr. Karmazin referring to when he called SIRIUS investors unsophisticated? What did he mean by that and why did he say it? It is easy to find unsophisticated remarks on the Yahoo Message Board - particularly those of bashers/shorts. Mel could not have been referring to shorts because they are not really investors. It can be argued that shorts are more sophisticated than investors. They certainly exhibited more refined knowledge and awareness of the prevailing downward trend in share price and they rode it down for all it was worth (we hope). Say what you will, that was not unsophisticated.

Karmazin meant us - the small retail investor. We are the unsophisticated investors he was referring to. Mel is a multi-millionaire with friends and associates in the same league. Was Mel apologizing to his peers for having so many unsophisticated shareholders? Was Mel embarrassed to have so many of us holding stock in his company? One thing's for sure, he kicked thousands of us to the curb with his ugly financing deal and the ugliest merger in history.

But everyone's entitled to a faux pas. If Mel makes money for us remaining unsophisticates, I can forgive him.

I have a copy of the New York Times article that he supposedly said that in. First off, he says many of the investors are unsophisticated but passionate so it is not a completely negative statement. Furthermore, he later pokes fun at himself saying that one should not take his investmant advice since he had previously purchased Sirius at a higher price.

I get the feeling that when the stock cratered he got a lot of negative communication, some of it from people with limited knowledge of the stock market.

Never saw the actual quote but here is my guess...

Judging by some of the comments posted on the FCC site and various message boards prior to the merger, I'm guessing many of these people he is referring to are angry people who can't spell (unless it is a four letter word) and were really pissed that there wasn't any post merger pop. I'm sure some of them got his email address and started a tidal wave of negativity and blame.

I'm sure these people would have seemed pretty unsophisticated, and then they went back to the message boards to bash him about his comment. Further proving their lack of vision... and well, sophistication.

He had just pulled off the near impossible (albeit on ugly terms) and droves of people were expecting to be instantly rich. I suspect many of these people got shaken out in the next few days. The longs stayed and the new investors came in. Hopefully this will help the price rise more easily without so many people looking for the quick pop.

Many investors are unsophisticated in trading stocks. They buy and sell on hype and news rather than looking at the fundamentals of the company. They react to the financing after merger approval as if it is pure dilution, rather than understanding it fully.

There are many emotional and swing investors, bot at retail, and in institutions.

Mel was not referring to the investors overall persona being unsophisticated, but rather their investment style.

What Mel is trying to do is get people to see the scaling of the business. How the metrics work, and for people to look deeper than a simple headline.

His comments should serve as a wake up call for all investors to look deeper and to understand the business model.

Right now investors are focused on the short term. The long term will measure the success of SDARS.

While Mel maybe should have chosen his words better, there is a distinct ring of truth to what he said.

Even analysts seem to put undeue focus and demonstrate a lack of understanding. One analyst demonstrated a lack of understanding in churn as well as ARPU, how these metrics change and why they change.

I bought more XMSR on margin at 10.50 on Thursday July 24th to benefit from the arbitrage. Bought more SIRI before that. I'd hoped for a pop to sell off a portion of my holdings for a tidy profit. Planning to retain the bulk of my position for future gains. I borrowed money to pay my margin calls to get punished some more. I'm so unsophisticated that I can see light at the end of the tunnel. I believe that Mel will make this a success. Its almost a no brainer. The potential for SDARS to be bigger and more profitable than the entire AMFM band, exists. When a pack of profit-making free stations with commercials shows up on SIRI, people will buy radios out of curiosity.

Look at the metrics of the deal with Mad Dog that crfceo outlined at his site. Look at OEM installations. Consider that SIRI and XM suffered at the retail level due to merger dynamics and confusion. SIRIXM will be a money machine.