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Thread: how high can siri go?

  1. #1
    doctorex is offline
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    how high can siri go?

    doctorex speaks:

    missing in the discussion in recent weeks is the biggest radish on the row: with the merger completed, siri is unmistakably a monopoly. think google, think ebay, think microsoft. there is no other way to put ulimited content into a moving car with no ads. that is the core market: prosperous people riding the roads and freeways, hungry for content, hating ads and their producers every second.

    so let's say 20,000,000 subs, not off by much, and it divides much more easily than 19,000,000.

    let's say arpu is $10 per month. this means monthly revenue is $200,000,000 (or $2.4 billion annual). we are not off by much here either.

    unknown is the expense side, but we know, for sure, that expenses are dropping per sub because the monopoly is established by the merger, and siri and xm do not need to compete with each other. this eliminates marketing expenses, duplicate content, admin., and so on. let us say it takes $1.2 billion annualy to run the business and pay the financing.

    profit would be $1.2 billion at this point. assume 40% dilution of common stock after the liberty deal, and we may have about 6 billion common shares. this calculates to annual profit per share of $0.20.

    the p.e. applied may be quite high, considering that siri is a monopoly. let us use 30. this is lower than other monopolies have seen.

    AND VOILA! SIX DOLLARS PER COMMON SHARE.

    but the pe will drift higher when the monopoly is appreciated more fully. let 's say 50.

    VOILA! TEN DOLLARS PER COMMON SHARE.

    and the price can be raised in two years, let us say by 50%, to bring arpu up to $15 per month.

    VOILA! FIFTEEN DOLLARS PER SHARE.

    and the subs will go up to 40,000,000. there are 40,000,000 literate prosperous people in the united states who will not tolerate ipod, or terrestrial radio, or their own cd disks, over, and over, and over.

    VOILA! THIRTY DOLLARS PER SHARE.

    doctorex has spoken.

  2. #2
    RMAN is offline
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    I like you thinking, hope it is half right!

    5.00 pps would be fantastic!

  3. #3
    homer985 is offline
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    $6/share X 6.8BB shares = $40BB Diluted Market Cap and a $43BB Enterprise Value
    $10/share X 6.8BB shares = $68BB Diluted Market Cap and a $71BB Enterprise Value
    $15/share X 6.8BB shares = $102BB Diluted Market Cap and a $105BB Enterprise Value
    $30/share X 6.8BB shares = $204BB Diluted Market Cap and a $207BB Enterprise Value


    Come on guys -- don't get too ahead of yourself. The MOST these companies were ever valued at was an EV of about $15BB, which was at the top of the hype in a roaring economy. Sirius XM would be LUCKY to touch $10BB in the next year or so. This stock is stuck to $1-$2 (before reverse split) for a long time.

    THAT'S what 40% dilution does to you.


    -------

  4. #4
    trippingthespeculatingpos is offline
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    is the idea of a stock buyback, presumably by malone, completely ludicrous?

  5. #5
    homer985 is offline
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    Liberty already owns 40% -- he can only purchase another 9.9% of the common for the next 3 years (per the agreement).

    The company cannot buy back stock, due to covenants in several of the debt issues.

  6. #6
    fugo is offline
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    so homer, if we are lucky we can get up to $2...what are the chances of that?
    I would take that any day (average 0.47).
    thanks again for your highly valued opinion, and one that brings us back to reality...hahaha

  7. #7
    frigginregan is offline
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    Dangerous talk DrRex especially considering the track record of this stock as of late.

    Personally I'm out at break even...which for me would be about a buck.

    I only hope we reach it BEFORE a RS.

    There are so many scenarios that can play out. No one knows for sure what will happen. Again, this stock has had a nasty habit of doing the OPPOSITE of what everyone expects.

    Anyway....I'll err on the side of caution, so somewhere between DrRex's overly enthusiastic prediction and Homer's more sobering $1 price target sounds more realistic.

    But if growth continues with 2.4 billion a year in revenue....and Sirius gets above a buck....the threat of a RS gets replaced with possible future share buybacks.

    Be careful tho. Such talk is like the dangerous song of the Sirens of Greek mythology. Who among us can resist their call? Strap yourself to the mast boys and plug your ears lest you end up smashing your ship into the rocks.

    How many times have we been lured into false hope only to be disappointed? TOO MANY to count with this stock.

    So as fun as it is to write about and hear such lofty numbers being thrown about for us longs who are sitting on a nice chunk of shares....I'd advise not taking them to heart.

    Again, depending on how things proceed, and IF we are lucky enough to get back to a buck...I'm cashing out most of my shares to recoup my original investment. I may let some ride...but I want my money back.

    Whatever your plan is....good luck. It's been a long bumpy ride. Hope for the best, by all means....but prepare for the worst. :-)

  8. #8
    Brandon Matthews is offline
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    Friggin....what are you a masochist? That's my job.

    When the company was loaded with debt, dilution was inevitable and its future uncertain, you bot the stock. Now with nothing to fear and a positive outlook, you want to dump it?

    I can understand wanting to reevaluate your position at that time, but such a wholesale emotional response is NOT in your best interests....take it from someone who knows

  9. #9
    Whynot is offline
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    All great thoughts above.....

    I'm wondering what will occur on Monday???

    Any thoughts on where SIRI may finish the trading day? .20? .25? more? less?..

    Thoughts on total shares trades....100 mil, 150 mil, 200 mil or more???

    Cheers,
    -Whynot

  10. #10
    RickF is offline
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    Quote Originally Posted by homer985 View Post
    $6/share X 6.8BB shares = $40BB Diluted Market Cap and a $43BB Enterprise Value
    $10/share X 6.8BB shares = $68BB Diluted Market Cap and a $71BB Enterprise Value
    $15/share X 6.8BB shares = $102BB Diluted Market Cap and a $105BB Enterprise Value
    $30/share X 6.8BB shares = $204BB Diluted Market Cap and a $207BB Enterprise Value


    Come on guys -- don't get too ahead of yourself. The MOST these companies were ever valued at was an EV of about $15BB, which was at the top of the hype in a roaring economy. Sirius XM would be LUCKY to touch $10BB in the next year or so. This stock is stuck to $1-$2 (before reverse split) for a long time.


    THAT'S what 40% dilution does to you.


    -------
    Homer - you are the voice of sensible reason here - and we appreciate your input GREATLY!! But ..... its the hopeful kid in me ...... What, in your wildest "possible" dreams could this stock go to in say ... 3 to 5 years?? And what would the co have to do to push that way??

    Again .... you ARE appreciated here!!

    Newbie but learning!

  11. Ad Fairy Senior Member
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