Originally Posted by Sirius Roadkill
You see that is just another example, If you recall I had told you that I would not count on Mel saying anything about new sub numbers until at least the second quarter. I think I said something like that is because Mel is Mel and he will wait till it is almost impossible to keep that number and not look foolish. Such as having something like 470,000 subs by the 2nd quarter.
Here Sirius Roadkill this is a perfect example of Mel as himself. read this and after that I will give you my translation of what Mel really said.
Lev Polinsky – JP Morgan
"I wanted to ask a question to better understand the guidance. If I look at $2.7 billion in revenue which is sort of the low end and $550 million in EBITDA and back out the first quarter then I get about 120 basis points of margin compression throughout the rest of the year compared with last year on an EBITDA margin basis. In Q1 you saw pretty good expansion of EBITDA margin ad obviously that is assuming you come in at the low end of revenue guidance. I just wanted to understand if there is spend coming up this year I should be thinking about or how I should be thinking about that implied margin guidance. Then one quick clarification question, do you have the number of the unpaid promo subscribers?"
Mel Karmazin
"Let me take the first one. We mentioned during our opening remarks about not at this time raising guidance. There is nothing we are anticipating in the course of 2010 that is going to change the way the company has been operating and looks as it did in the first quarter. The issue that could change is if in fact we are going to add significantly more subscribers then obviously our SAC costs would go up; something we would be very happy to see occur. But we understand the issue on our guidance. We understand if you annualize the EBITDA from where it is now, we understand everything you have raised and all we can say is that we are looking at the guidance. There is no concern about the rest of the year for the company. You should anticipate it is still early in the year. We just got the April car sales numbers yesterday so you will just have to be a little bit patient before we do anything on guidance. David?"
Translation of what Mel really said: Listen you twit, I know our projections are starting to looking ridiculous but I like to underpromise and over deliver haven't you read that about me. So, NO there are not any extra cost you should be worried about, you dumb twit. You are just trying to force me to give better projections and that is not my style.
Beautiful! Love it!
Mel can double-talk with the best of them . . . I especially love when he toys with the analysts who try to ask the same question 6-ways-to-Sunday as if Mel is going to somehow slip-up and spill the beans
The analysts are useless bloodsucking parasites . . . they would be more productive to society by harvesting wheat or corn crops (Adam Smith)
The analysts want everything handed to them on a silver platter . . . it's nice when Mel turns the platter sideways and shoves it up their collective $!#&*
Mel is playing his cards just right!
Now here's my translation:
Mel, dismissively patting the research analysts on their heads and in his most derisive tone, exclaiming:
"here boys . . here's your EBITDA guidance. now go back to your little semi-autonomous workstations, load-up your off-the-rack discounted cash flow software and grow some fn hair on your ass"
Some big pullback today huh?
Hope Jon Pluc was lucky enough to ring the bell at $1.11
but somehow I doubt he did . . . poor bastard
I am sick and tried of the lack of common sense at The Street.com. There latest bash on SIRIXM (and their last gasp because they have nothing else at this point). Is now that SIRIXM loses ether way on Stern. REALLY have they ever heard you cant have it both ways, you dumb twits. So lets take a look at their logic on this one:
1) They say SIRIXM cant afford to pay Stern that much.
2) They say they cant afford to lose Stern because of all the subscriber he gets them.
REALLY, I mean REALLY is that what they are saying!!!!!!!
Ok so where is the logic in those statements?????
Listen, you twits that makes no sense what so ever. Ether he gets them enough subs to pay for what they are paying him or he does not and then they pay him less or it is worth getting rid of him. IT DOES NOT GO BOTH WAYS. Here you dumb twits let me give you an example: That would be like saying AAPL cant afford having the IPAD because it cost to much to make but they cant stop making it because it is to popular.
Ok now that we have shown that the people at The Street.com are stupid I will show just how stupid they are.
Lets just take each statement by itself.
"1) They say SIRIXM cant afford to pay Stern that much."
Really so how in the hell is that when they hired him they only had about 1 million subs, they now have 9.5 million subs (that takes into account ONLY SIRI half). At least 2.3 million of them Stern is most likely responsible for. Mel has already said, if they get just 1 million subs from Stern then he has paid for himself (and that does not count advertising revenue).
NEXT
"2) They say they cant afford to lose Stern because of all the subscribers he gets them."
That has some merit but the basic fact is that even if they lose 1 million to 1.5 million subs (and that is going way out there) they would still have 17.5 million subs as a total. A loss yes but not anything they cant afford. On top of that they would have 100 million a year to help sofen that blow. Not to mention I dont think that many would leave anyway, it is called the "bate and switch" anyone ever heard of that, it works, that is why businesses use it all the time. The point is that while many of Sterns fans came for him the ones that did most likely (as a matter of fact CAN'T listen to him for more then 5 hours a day). That means they listen to other channels/shows the other time. They can always go where ever Stern gos, but that does not mean they will also cancel their subscription to SIRIXM that they have liked for other things for YEARS NOW. My personal estimate would be that these analyst are all wrong (ONCE AGAIN) about how many subs would churn out because of thisor the other. I think it would actually be closer to (at most) 500,000 then any of their estimates.
So once again there is one basic fact, ether Stern is worth what they are paying him or he is not worth it. That means one two things happen They pay him what they believe he is worth and he stays OR they let him go. Ether way the company sees it they will be more profitable for it. That is the bottom line here it does not go both ways.
Now if I worked for "The Street.com" this would be my logic: The company is losing money on Stern but they will pay him more to keep him because they cant afford to lose him, then I would have to be saying to myself, "really did I justy say that".
P.S. Just so people know. You see what they at The Street.com are trying to do here with those kinds of articles dont you!!!! They are setting you up to say the stock gos down NO MATTER WHAT HAPPENS, that is there agenda. That is the only conclusion I can come up with when someone is that illogical and makes as little sense as that (Havasucker is a perfect example of how bad it gets when you have an agenda).
Reading the Post-Earnings Tea Leaves on Sirius XM Radio
5/5/2010 2:38 PM
As Joseph Hargett reported in Tuesday's Opening View, Sirius XM Radio Inc. (SIRI) was hit by a wave of post-earnings selling pressure. Even though the company's first-quarter profit of 1 penny per share narrowly surpassed analysts' expectations, SIRI is currently mired in red ink for the second day in a row (OK, in fairness, so are most other stocks). In an article yesterday, Franklin Paul of Reuters observed that "investors may take issue with a decline in the quarter in free cash flow." Whatever the cause, investors are certainly taking issue -- SIRI has shed about 9% since its earnings report hit the Street.
Considering the stock's post-event pullback, I found it interesting that calls were the options of choice on SIRI yesterday -- at least, among traders on the International Securities Exchange (ISE). During the course of Tuesday's session, options players on the ISE bought to open 3,246 calls on SIRI, compared to just 9 puts. Most of those bullish bets appear to have been added at the stock's January 2012 1-strike call, which gained 3,359 contracts in open interest overnight.
So, what do we make of this call buying activity? Are bulls buying into the stock's dip, or are short sellers buying calls in order to hedge a fresh round of bearish bets? There's a solid case to be made for either side of the argument -- SIRI has so far found support at its rising 10-day and 20-day moving averages, but shorts have a known affinity for the stock. In fact, short interest on SIRI surged by about 60% during the past month.
-posted by Elizabeth Harrow (eharrow@sir-inc.com)
5/5/2010 2:38 PM
Could not have said it better myself john. The day Jimmy Cramer was born he was waaaaa-ing out of both sides of his mouth . . . . I am sure, however, that thestreet.con will not be alone in this inane perspective
Stern Stays . . costs too much in expenses
Stern Leaves . . costs too much in revenue
Last edited by Sirius Roadkill; 05-05-2010 at 03:27 PM.
Every time I ran a scenario, it came out Stern was worth it. Let's try it again.
2 MM subs x $10 / sub = $20MM per month x 12 months per year = $240 MM / year.
Say 1 MM subs; then you $120 MM per year. Say 500k subs; then $60 MM per year.
From a revenue perspective, these scenarios appear favorable. What we don't neccessarily know is expenses.
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