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Thread: Just Looking Back In Time........

  1. #1
    J56D is offline
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    Just Looking Back In Time........

    October 6, 2004: Share Price: $3.87
    "King of All Media" Howard Stern and Sirius announced an agreement that Stern will move to Sirius beginning January 1, 2006

    November 18, 2004
    Former Viacom president Mel Karmazin to join shock jock Howard Stern at satellite radio company; Sirius stock soars.

    Sirius (down $0.23 to $4.72,) shares soared 22.6 percent on the news after the bell to trade at $5.69.

    November 18, 2005 Share Price $7.28
    November 18, 2006 Share Price $4.05
    November 18, 2007 Share Price $3.52
    November 3, 2008 Share Price $0.31

    April 22, 2005: Share Price: $5.10
    Sirius Satellite Radio's ad revenue will rocket from $1 million to $100 million by 2007, CEO Mel Karmazin predicts, turning one of the hottest consumer electronics segments into one of the fastest-growing advertising mediums.

    Mr. Karmazin, who recently hired two veteran radio executives to build a sales force, said Sirius will record ad revenue of up to $8 million this year, $50million in 2006 and $100 million by 2007.

    Mr. Karmazin: In 2007, we generate positive cash flow. If you look at most analysts, they would have us in 2007 at the 6 million subscriber level. We haven't given more guidance than that, but that's about where it becomes profitable. Then, the satellites are up, you've paid for your programming, so once you've exceeded your fixed costs an extraordinary amount of the incremental drops down to your bottom line.

    The only talks that are going on right now is we committed to the [Federal Communications Commission] that we would develop an interoperable radio. We have a team of people working in a lab that both companies are funding to get interoperable radio done. I believe in about a year th

    January 9,2006: Share Price: $6.57
    Howard Stern begins broadcasting his show on SIRIUS Satellite Radio. His $500 million dollar deal (+ stock bonuses) make Stern the highest paid radio personality in the U.S.

    After three days on the job at Sirius Satellite Radio, Howard Stern filed to sell all 34 million of his shares.

    November 24, 2006: Share Price: $4.26
    You've got an avalanche of debt and no earnings. Your bonds are rated CCC ó in other words, junk. Why in the world should anyone buy your stock?

    It will be higher in the future. This year we will have over $600 million in revenue; next year we will have $1 billion. By 2010 we will have $3 billion in revenue and $1 billion in free cash flow. Using the 15 to 20 times cash flow valuation Wall Street gives growth companies, that's a market value of $15 billion to $20 billion. Today it's $6 billion. The stock will take care of itself.

    What are you getting out of this?

    I am having a blast. I love taking over a company that's not making money and having it make money. That's why I came here: Everyone says, "Gee, it's a great service and I love the content, but what's the business model?" I'm going to show them exactly what it is.

    January 9, 2007: Share Price: $3.71
    Sirius Satellite Radio, a provider of digital radio programming with more than six million subscribers, has paid its on-air personality Howard Stern an $83 million stock bonus, which was tied to subscriber targets set when he signed a $500 million contract with the company in 2004.

    February 18, 2007: Share Price: $3.70
    It's official: XM and Sirius plan to tie the knot

    Tuesday, October 30, 2007: Share Price: $3.29
    What you're seeing now is a narrowing of the loss. We're generating a whole lot more revenue. We're growing our revenues a lot faster than we're growing our expenses. When that path crosses, we have not disclosed, but a really good sign of how good the business model is is that this coming fourth quarter, the quarter that we're in, we will be free cash flow positive, so we will be free cash flow positive. Then we will become EBITDA positive. Then we will become earnings positive.

    March 24, 2008: Share Price: $3.15
    DOJ approves merger of XM and Sirius.

    April 30, 2008: Share Price: $2.57
    Mel Karmazin made $32 million in 2007; More than XM Management - combined

    July 29, 2008: Share Price: $1.58
    Karmazinís deal making didnít end when the FCC finally approved the deal Saturday.

    Instead, Sirius had to hit the road for its efforts to refinance $1.2 billion of bonds whose terms would be affected by the combination. Karmazin met with 15 investors, according to a person familiar with the situation; 11 decided to buy up chunks of the bond deal. The outlook was hardly auspicious; not only had Chrysler Financial just done a big offering that could have soaked up investor demand, but also six of the 10 attempted high-yield offerings in the previous month had failed. In addition, the yield on Siriusís 9.625% bonds had widened two percentage points in that time. Still, the bankers placed the offering, even managing to increase the size by $300 million. In the end, $778.5 million of 13% notes due 2013 were placed at 89.93 to yield 16%, according to Standard & Poorís Leveraged Commentary & Data. The deal priced at the top end of expectations, without any new issue discount, and was sold to 70 investors in the end.

    August 4, 2008: Share Price: $1.39
    Mel Karmazin purchases 2,000,000 shares of Sirius

    October,14 2008: Share Price $0.48
    Chief Executive Mel Karmazin said Tuesday that U.S. auto sales will drive $300million to $400 million in revenue gains for satellite radio next year even if Detroit has an awful year.
    Last edited by J56D; 11-04-2008 at 12:59 AM.

  2. #2
    spanyo is offline
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    This post would have been even better on Halloween.

    Interesting nonetheless.

    Thanks.

  3. #3
    homer985 is offline
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    2 notes that should be considered when reading this.

    You appear to be directing this post toward Karmazin, which in and of itself is fine -- however, Karmazin had nothing to do with the Stern contract or any of his bonuses. Those that work in radio that know of Karmazin's history know that he would never have signed Stern for that amount. Regardless, the Stern items you bring up have nothing to do with Karmazin.

    Secondly, while the $32 million "earned" by Karmazin in 2007 is accurate, your pointing it out is a bit confusing. Because his earnings in 2007 are a combination of his salary, bonuses and stock options/grants issued.

    The problem here is that his stock options being issued each year are based on prices from when they were first granted, not at the price when they vest. He was granted a number of stock options that vest over a 5 year period -- as they vest, the company has to charge them to the earnings at the price they were granted... and the stock price was much higher when he signed, as you note. That is why the charge is so high. But that doesn't mean that he "earned" that amount. In fact, all of his stock options are worthless -- and will remain worthless for some time. His only real earnings in 2007 was his salary and bonus. Which was considerably lower than $32 million.

    Regardless, the $32 million was the amount charged to shareholders -- that amount is correct. However he didn't "earn" that amount.

    FWIW


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  4. #4
    GetItStraight is offline
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    J56D - Very insightful. Thanks for taking the time to post.

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