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Thread: Cramer says First Quarter

  1. #1
    Newman is offline
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    Cramer says First Quarter

    In his "Lightning Round" on December 6th Cramer states:
    ""I think the merger happens in the first quarter! ... You're going to get 6 dollars ... six bucks, then we're done.""

    Two things here: Before, he was saying $5 this quarter, now he is saying $6 next quarter.

    Important to point out: He is talking about merger COMPLETION, not announcments. I still think DOJ is going to announce before Christmas, if not today. Im just worried about all the "leaks" making people making those decisions change their minds.

  2. #2
    SiriusBuzz is online now
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    Nice, 6 is even better

    My question is...how high will the spike go on the news and then...how quickly will the stock pull back and correct? Do you think it will hit its high on the news or a few days after the news? OR do you think this stock is going up and staying up?
    Charles LaRocca
    SiriusBuzz Founder

  3. #3
    Mario is offline
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    dump on the news

    Like many people, I purchased Sirius a while ago, and it has been dead money ever since, except for the last few month. And more than dead money, it's been volatile, damn risky. I've averaged down, and my net cost basis is about 3.10.... I'm sure many people have done this too, or maybe they are still holding from the 4.50 days.

    Either way, after well over 1 year, the stock has done poorly. The only reason I have not sold its because of the merger. I've stayed with it so long, that I just decided to throw in the towel, and stick with it a little while longer. I think this sentiment is shared by others as well. Merger or not, I'm hanging on until we get the news.

    After this thing is announced, we likely have a few days (probably 3), then a pull back, a small one, maybe 5%. Then we get all kinds of negative and positive news from every grab ass analyst in the country, so the stock will go up and down on a whim. Over the next few month it trends upward, but probably not hugely, and it will be volatile.

    Anyway, what I will do is sell about 1/4 of my position within 3 days of the news. And another quarter after about a week. And then I'll sell off the rest over a few months.

    I like the stock for the long term, like 5+ years, but I won't gamble with my profits. Rather take my money while I can. But I will likely hold on to about 1k shares, maybe more, just for old times sake. I still think that maybe in 10 years this company could be worth about 30b, so about $10 per share. (taking into consideration the XM dilution of course). But it will certainly be a rocky ride. If we do merge and if by miracle we reach 5.50 or 6$, I would not be surprised if the stock falls back down to 4$ on a volatile dip.

  4. #4
    Newman is offline
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    Very nice post Mario. I almost mirrors a post I have on Fool.com boards HERE posted back on 12/3.

    The million dollar question.

    Immediate effect will be a large jump. Sirius closed at $3.75 today. If the deal is approved tommorrow, expect to see $5. If the deal is denied tommorrow, expect to see $2.25ish.

    As far as XM, it closed today at $15.83. If the deal is approved tommorrow, expect to see $22-24. If the deal is denied tommorrow, expect to see $9

    The problem with these prices is that they are not SUSTAINABLE. Sirius is not worth $5 with their financials right now. Combined? We will have to wait and see what they can do. You will see a rapid drop in price after the initial spike as merger cheer drops and investors start looking to the big picture at the financials. Expect it to drop from around $5 to back around $4, and hold there for about 6-12 months. Then, it will move based on combined financials and outlook.

    Plan: MY plan (I am a rookie investor with no formal training in stocks) is that I have a sell on Sirius at $5.50 and a sell on my XM stock at $25. I will sell when they hit that number, lock in the profits, and wait for it to come back down before picking it back up. I still think the combined company is a goldmine waiting to happen, but I cannot resist taking some profits on the merger.
    Just my thoughts

  5. #5
    clueless is offline
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    What do you guys have your sell set at just incase the merger is denied? Also, if it is denied, is that it? Game over? Or will Sirius/XM appeal? Can they even do that?

  6. #6
    Mario is offline
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    Cool Newman, I guess we pretty much agree.

    I sold my XM a while ago, so I don't have a sell target, but Newman's price of about 25$ seems right for me. If I still had some, I'd hope to sell at that price.

    As for if the sale doesn't work out, I would sell at least half my position anywhere in the 3's if possible. Basically, I will sell at least half as soon as possible, and hope to break even. The other half, I would just leave in my account and forget about it. I would write it off mentally and look back in a few years... It would probably still oscillate between $3 and $4 in the short term.

    Without a deal, analysts will crap on both companies, but probably more on XM, which would eventually have a positive effect on Sirius, both in stock price, and likely subscriber additions.

    I'm sure there is some sort of appeals process, and Tyler has said that they would probably file suit against the FCC or DOJ. It will not be game over. Unfortunately, if it gets into a legal battle, the shares will probably dive even more, since it would likely mean another year of limbo.

  7. #7
    Newman is offline
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    Actually, if I recall correctly, there is ONLY an appeals process for the Dept of Justice, NOT through the FCC. I could be mistaken though.

    I definately see Sirius going to 2.50ish and XM going to 9ish if the deal is squashed. If that happens though, I will sell ASAP, and buy back at those low levels. SatRad is just too damn cool for someone not to have, if only for the bandwith and the satellites.

    I could definately see another company picking up either one of the two. XM has the lower market cap, so if it is a company who doesnt care about brand recognition (Read: Apple, Google), they will go with XM. If they do care about brand recognition and growth, they may buy out Sirius and pay the extra money for the name and growth (Read: Clear Channel, AOL/TimeWarner).

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