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Thread: The perception of reality

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  1. #1
    Siriusowner is offline
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    The perception of reality

    I know everyone is waiting for the refinace to get announced, I even got caught in that game. The truth is that facts will not make you money.

    Have you ever wondered why one stock drops in the face of positive news, while another rises on the heels of what appears to be damaging news ?

    How often have you scratched your head in absolute astonishment, trying desperately to understand why the market seems, at times, to totally defy the facts and/or logic.

    Well, the truth of the matter is that reality does not matter in the investment world. It is the PERCEPTION of reality that is important.

    If you as an investor believe that the market responds to what is real, you are mistaken.

    The truth is that stocks rise and fall based on BELIEF not facts.

    There will be times when the truth (facts) and the perception of the investors will be identical, perfectly in sync. There will be other times when the truth and the perception of it will be completely opposed or out of sync.

    One can certainly argue that the perception and the reality cannot stay out of sync forever, and that what is real will ultimately prevail. But who has forever ?

    Do you all think SIRI stock is in sync with the truth ? or out of sync ?

    Think about it.
    Last edited by Siriusowner; 11-18-2008 at 09:40 PM.

  2. #2
    SiriusHope is offline
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    Yes, Sirius XM (SIRI) Can Certainly Go To Zero
    Henry Blodget | November 18, 2008 7:49 PM

    A friend approached us with a potential stock pick this afternoon: Sirius XM (SIRI) on the theory that it had gone so absurdly low ($0.20) that it couldn't go any lower and would probably soon go to $0.30, resulting in a 50% gain. We suggested our friend instead hoard his hard-earned cash.

    Could Sirius go to $0.30? Of course. Could it also go to zero? Yes.

    Mel Karmazin's company currently has an equity market capitalization (value of the stock) of $650 million. It also $360 million of cash and $3.3 billion of debt, so its "enterprise value"--the implied value of the business itself--is about $3.7 billion. The only thing that has to happen for Sirius (SIRI) stock to go to zero is for the market to conclude that the company is worth less than $3 billion. This would wipe out the company's stock value, leaving the company in the hands of the debt-holders.

    Why might the market soon conclude that Sirius is worth less than $3 billion? Because it's running out of cash. In the first 9 months of this year, Sirius had negative free cash flow (cash from operations - capex) of $300 million. $360 million of cash won't last long at that burn rate.

    Sirius's stock is now low enough that it will be hard to raise capital by selling stock, and we can't imagine who would be willing to lend the company money right now. That means the company's cash cushion is likely to get dangerously low, perhaps forcing Sirius into a highly dilutive equity deal that will put additional pressure on the stock. So it's not hard to see how the stock could go to zero (or close to it).

  3. #3
    Demian is offline
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    Please post a link to the original source along with articles.....

    Here is the link to that article....

    http://www.alleyinsider.com/2008/11/...nly-go-to-zero

    That outfit has been spitting out bearish articles - I don't trust their motivations.

    I wonder if someone used their tip line to tell them it was going to zero?

    Be careful out there people.....
    Last edited by Demian; 11-19-2008 at 01:52 AM.

  4. #4
    SiriusHope is offline
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    trading now at .1806

    IMO...the close today should be about .17 or lower as down spiral takes more hold

  5. #5
    SiriusHope is offline
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    at this rate of spiral...seems we can have a pps of .13 by this friday...and by shareholder meeting be at less than a dime.

  6. #6
    SiriusHope is offline
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    already trading at .17 low actually was .163 maybe even see .15 by end of this day...what a F%&#@ loser that bastard MEL is and he is setting us all up to lose with him.

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