DOJ Probes Lloyd Bankfiend

Feds launch criminal probe of Goldman Sachs
By The Associated Press
April 30, 2010, 5:01AM

WASHINGTON -- Stepping up the pressure on Goldman Sachs two days after its executives were grilled and publicly rebuked by lawmakers, the Justice Department has opened a criminal investigation of the Wall Street powerhouse about mortgage securities deals it arranged.

The criminal inquiry follows civil fraud charges filed by the government against Goldman two weeks ago and as Congress pushes toward enacting sweeping legislation aimed at preventing another near-meltdown of the financial system.

The investigation by the U.S. attorney's office in Manhattan stems from a criminal referral by the Securities and Exchange Commission, a knowledgeable person said Thursday. The person spoke on condition of anonymity because the inquiry is in a preliminary phase.

Couldn't happen to a nicer bunch of guys

Remember when Goldman analyst Mark Wienkes kept cutting the Siri price target in half back in the fall of 2008? Remember that? And then sure enough the share price would eventually hit Wienkes target? Almost seemed as if Wienkes was clairvoyant. Certain financial publications even dubbed him "Analyst of the Year."

One big problem . . Wienkes analysis of the underlying metrics was badly flawed; just go back and read his reports.

Complete misinterpretation of the underlying fundamental metrics . . . but hits the bullseye everytime?

Of course Goldman Sachs was shorting the convertible bonds (Feb Converts) at the same time as Goldman's "independent research analyst" Mark Wienkes was cutting his price targets in half.

Tail wagging dog?

Kinda like Goldman Sachs "paying" Standard & Poors to "credit-rate" products being marketed to Goldman Sachs clients . . . :rolleyes:

. . . . cuz I sure didn't

Analyst predicts larger losses for Sirius, XM; shares tumble
June 19, 2008 10:21 AM | 33 Comments

Shares of Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. tumbled this morning on a downgrade from a Goldman Sachs analyst, citing larger losses for each company and threats from other technologies like the iPhone.

Analyst Mark Wienkes, slashed his 6-month price targets for XMSR from $11.50 to $6.50, and cut his prior target for SIRI shares from $2.25 to a mere $1.75. Wienkes maintained a "Sell" rating on XM and a "Conviction Sell" rating on Sirius, and forecast larger losses in 2009 and 2010 for both companies.

The Goldman Sachs analyst said the stock prices are too high because both companies are facing declining cash flows.

Wienkes said that young customers are buying fewer satellite radios and are instead turning to other technologies like the latest iPhone (this is news?!). Wienkes said these other options threaten the prospects of satellite radio - an amazing realization, since that's the argument Sirius-XM have been using to justify the merger all along.

Shares of SIRI tumbled 15% on the news, while XMSR fell nearly 20% in morning trading.

While Sirius beat Wienkes' net subscriber additions estimate by about 20%, revenue just matched his target. This is a sign of things to come as Sirius and rival XM (XMSR) sign up fewer customers through retail sales and more through less-lucrative "OEM" sales, where radios are built into cars.

Sirius' 525,000 Q3 net new subs included only about 64,000 retail net adds versus 206,000 a year ago (down 69% y/y) and 130,000 in Q2 (down 51% q/q). Translation: Sirius' retail channel bombed last quarter (despite all sorts of new products).

As the shift to OEM sales continues, Wienkes thinks XM is in better shape than Sirius: it has a larger share of the OEM market. Therefore, if the retail channel gets weaker, he thinks it will impact Sirius more than XM.

iPods are kicking satellite radio's butt.

Wienkes estimates only a roughly 30% chance the XM merger will go through.

Read more: http://www.businessinsider.com/2007/...#ixzz0malysWCe

In a note today titled “Deal approval imminent? Even so, will demand materially increase?”, Wienkes writes that approval by the Justice Department in the near future may drive up the shares of both stocks, but that “merged or unmerged, our outlook for satellite radio is cautious given our view of unrealistic cash flow expectations, and hence valuation risk.” Specifically, the retail satellite radio market promises fairly weak demand, opines Wienkes, while sales to car makers are lower margin, and therefore don’t help. And estimates of a $5 billion savings to be had through “synnergies” in the event of a deal are probably too high, thinks Wienkes.

Weinkes says he thinks the likelihood of the deal getting DOJ and FCC approval is “less than 50/50,” and in graphic in the report, he puts the likelihood of a “No” vote from those offices at 70%.

Goldman Whacks Sirius XM Growth Estimates, Drops Price Target To $0.25 (SIRI)


Dan Frommer | Oct. 28, 2008, 10:43 AM | 81 | 23

Sirius XM Radio (SIRI) has enough bad news to deal with: A souring consumer economy; the decline of the U.S. car industry, where Sirius gets many of its new subscribers; and growing competition. Some new concerns for Mel Karmazin and company: "The viability of the current business model" set against about $1 billion of debt maturities "and an uncertain amount of cash on hand," Goldman's Mark Wienkes notes today.

"Specifically, we believe the current business model will have an increasingly difficult path as the cost of churn [subscribers fleeing the service] impairs the ability to generate free cash requisite to satisfy debt maturities or ultimately accrue any meaningful value to shareholders," he says.

As a result, Wienkes is cutting his growth targets for Sirius XM. He now thinks they'll sign up 644,000 net new subscribers this quarter, down 11% from his previous estimate of 724,000; 1.6 million next year, down 20% from his previous estimate of 2.0 million; and 1.4 million in 2010, down 26% from his previous estimate of 1.9 million.

Wienkes rates SIRI "conviction sell" and thinks the stock should trade for 25 cents. It's down 10% today to 34 cents.

Read more: http://www.businessinsider.com/2008/...#ixzz0manZbk11

The interesting thing about the above is the 1.4M sub projection for 2010!

Contrast Wienkes forecast with current Siri guidance of 500,000 net ads and EBITDA of $500,000,000

what?? how can that be Mark??

I thought you said the business model was doomed at 1,400,000 net ads?

How can the company generate positive EBITDA on 500,000 net ads Mark?

Come-on Mark, you know the answer . . .

Oh that's right . . . Lloyd Bankfiend was shorting the Feb Converts . . . I almost forgot. Yup, you were right . . terrible business model.

Wag the Dog Mark . . . Wag the Dog

Yep, I had said basically the samething as the articles came out and after his PPS targets got hit. I had always said he has been so far off on estimates and reading of the industry, yet somehow his PPS targets were hit. I had always found that very strange.

I had always said that the only reason they would lose money at a level of 15 million combined self paying subs would be because they are being to aggressive in going after new subscribers. As we have seen they were able to improve FCF and profits best during a terrible year for grtting subscribers. I hate to say it but I like having the levels we are at right now. They almost needed a slow down, for the self paid subscribers to catch up with the cost of adding new subscribers. I am actually happier with a slower but more profitable grind up in subscriber numbers. People were just getting to sick and tired of the constant losses.