Janco And Merrill Issue Reports On Sirius XM
Janco and Merrill Lynch both came out with reports on Sirius XM Radio today. From Janco’s perspective, analyst April Horace is downgrading the equity to market perform with her price target under review. Merrill’s Jessica Reif Cohen is maintaining her $1.00 price target with an underperform rating.
JANCO
Horace noted in her report that she was surprised by Sirius XM’s move to do the $30,000,000 in debt financing prior to the announcement of the third quarter numbers. She noted, “…we were of the understanding that SIRI was going to wait to disclose third quarter results as well as possibly fourth quarter subscriber additions before they actually went to the debt markets. We thought if the results showed progress, it maybe a more opportunistic time to raise the debt. We have to admit that SIRI’s recent moves have surprised us, especially before the third quarter earnings release, and not necessarily consistent with previous statements.”
Horace also noted that the possibility of dilution and a reverse stock split Also “Sends Alarms” to shareholders but also believes, “a reverse split makes sense”, however she also concedes that historically, reverse splits have caused overall declines in value.
In closing the report Horace stated, “We believe in the long-term satellite radio sector. We are unfortunately downgrading SIRI to a Market Perform due to the significant uncertainties in the market place and concerns about management’s inconsistent actions. At present we are still reviewing subscriber forecasts, potential dilution, and cost of debt and, therefore, are suspending any price targets.”
Merrill
Jessica Reif Cohen issued a new note today dealing with the recent move by Sirius XM in issuing shares. Cohen noted, “every little bit helps” and that the action was “consistent with what we wrote last week (Refer to: “Reverse Split and Dilution on the Table”)”
Cohen feels that the debt markets are forcing SIRI’s hand, and that a combination of several factors have “hindered SIRI’s prospects to successfully refinance its 2009 maturities at a reasonable rate without having negative impacts on the long-term FCF profile of the credit.”
Cohen also points out that SIRI’s sales channels under pressure and therefore she reiterated the equity as Underperform, outlining the following reasons:
- 2009 debt refinancing risk
- Risk of dilution to the equity
Merrill will also be reassessing their current PO of $1.00 considering SIRI sales channels have come under increased pressure with:
- MLe forecast for U.S. auto sales lowered to 12.5mn SAR from 14mn SAR (SIRI guidance on 09/09/08 was based on14mn SAR
- Deteriorating outlook for U.S. discretionary retail spending
It would appear that analysts are finding it more difficult to be bullish in the short term on Sirius XM radio. Should the company post decent third quarter and fourth quarter numbers, the potential will look better, but the debt still needs to be addressed. In current market conditions, it is hard to be positive on the prospects of getting a good debt refinancing deal. However, should the company accomplish such refinancing, a large cloud would be lifted.
Position – Long SIRI
These analysts are repeating some of the very same things that some of our own members here have been saying lately.
It seems as though many of you on here have what it takes to be a big shot analyst at one of these firms.
Keep up the good work.
Tyler thanks again. It does seem that those of us fans left, echo the same sentiments of these analysts. Who Knew or Who Cares. Only “Pink” knows for sure.
everyone better listen the sirius buzz with mike on the show, tell what is going on with mel and the issues at hand lets all wake up
ITS OVER
Now go to work
I will listen to the show but really, M. Hartleib is not news. He has been posting for a while and his legal actions have been known. Most here did not value his efforts through the Merger process and now he seems to be everyone’s answer. Although I feel his complaints have merit the FCC review and the DOJ didn’t. A class action on the grounds of interoperability is over. Maybe there will be something else but I don’t see it helping our investments at this time. Banding together as shareholders is a great idea, but I don’t want to follow the “rabbit down the hole”
Well at least they have suspended the delisting policy through mid January. This should bring a temporary sigh of relief to SIRI allowing them to put there more immediate focus back on the debt. Delisting suspension could even be extended.
Janco cite’s “management’s inconsistent actions”. Merrill says (issuing shares) action was “consistent with what we wrote last week (Refer to: “Reverse Split and Dilution on the Table”)”
Consistent or Inconsistent – your choice.
Tyler, please put an S in front of irius in your title.
Trading AT .034. Someone on here said everyday it just continues to drop. Whoever it was so far you are right.
I was hoping for a final bottom but it looks likes the fall is not going to stop.
You would think Mel would give some news release and at least try to least stablize the share price.
Almost 20 million subs and we are heading down?
Three loans that can be serviced and we heading down?
In five years we could be close to 30 million subs and we are heading down?
The fastest growing company in America last year and we are heading down?
I guess he wants it as low as it will go for the reverse split.
What is his story? Really what is Mel trying to accomplish?
If the 3rd quarter report is more of the same and no good news and no plan that is going to turn this company around. I would join a limited class action to replace the mangement and the board of directors because none of this makes sense anymore.
A lot of us have pledge $500.00 to $1000.00 to give the company, and with enough of us we could have an impact.Many have written SiriusXM and told them that, and they do nothing.
One bad loan at the merger, two more loans coming and we can’t get financing with the potential this company has?
The spectrum that the company owns now is worth something.
I was a big fan of Mel up until the merger. What he said he was going to do, he did up to that point.From the merger point on it is like a different CEO, and a different goal that he is now trying to accomplish.
What that goal is Janco does not know and neither do we.
This makes me sick
imho
vaporgold
Vaporgold
Trading today at .35…want to guess where will this pps be by the time of the shareholders meeting about 60 days from now…it seems to drop .01 per day now?
if mel k. really believes this co. is going to be the biggest media co. in the us, why doesn’t he and howard loan the co. 150mill a piece at a nominal interesr rate. they would make interest on their money at the same make more as the stock goes up. say something mel?
I officially changed my name.
Mel IS worthless. The antithesis of a leader. Lawyers are probably shackling his loose lips to a water boiler in the basement so he doesn’t cost the company more money through the reckless misleading and fraudulent comments they will need to defend in court. Every industry icon has to wither away some day and Mel may have seen his best days behind him and never come out of retirement. I think the sun has overbaked that freckled head of his. I will be riding this stock down to zero and consider it a very expensive set of college courses on principles of investment.
-Previously known as Thanks FCC
it looks like the stock will be NEGATIVE 30 cents by the time the shareholder meeting starts. Please give us a buyout for a dollar.
This thing will slowly bleed out unless we get some good news SOON.
Wasn’t Mel supposed to speak this week…what the hell happened to that?
i cant believe this stock is 33 cents, y arent the higher ups buying any shares at these low prices, they must know this stock is goin to a penny.
Now .33 cents and I can almost buy almost triple the shares I had if it drops another few cents and I’m still afraid to buy.
It appears others feel the same right now.
Nobody wants this stock at all right now because of the threat of BK, whether real or not.
The debt is overwhelming in a market where credit is bad and your still losing a ton of $ and haven’t proved otherwise & likely can’t prove otherwise until a few more quarters.
There is someone apparently willing to but 1 million shares at .30 on level 2.
Sirius doesn’t even have an S in it anymore…
Demian Says:
Sirius doesn’t even have an S in it anymore…
———————————————–
It’s like the picture on back to the future with Michael J Fox fading…
And by the way, this stock needs a 1:15 right now just to get back to $ 5, but if they have to sell shares, your looking at a 1:30 to bring it to $10.00 before dilution.
If it’s being priced in now, then the RS would be less, but who knows ?
Is the “I” or the “X” next to go?
Maybe we’ll be left with iri (eery)
I think the market is under tremendous pressure with MSFT and some other big names reporting between tonight and tomorrow a.m.
Buy before close today if you have BALLS & you think its’ overdone or we test new lows on the indexes tomorrow or by end of next week by Halloween.
Something has told me not to get in before Nov & with elections, maybe Nov 5th or so.
On Tuesday, September 9, 2008, at the Merrill Lynch conference, Mel said among other things that refinancing of the 2009 debt would not be an issue. I believe it was under questioning from Jessica Reif Cohen that he said that in addition to “commercially available” sources of funding that there were “several sources of private funding” also available.
I believe Reif-Cohen pressed him on this and he then said that if neccessary he would loan the company “his own money” and then uttered the now infamous (and perhaps prophetic) line “but I hope it doesn’t come to that.”
If you will recall, there was a great deal of shareholder outrage after this presentation. Several long-time Mel supporters began to question aloud if Mel had “thrown” the presentation.
The Janco downgrade confirms beyond this forum that management’s actions have been inconsistent; they are being kind. Mel talking out of both sides of his mouth is the real headline.
Remember the talking points right after the merger? We heard them over and over and over again (20mm subs, fcf q4 ’08, fcf fy ’09, 2nd biggest media subscription bus yada-yada-yada) Mel hit the speaking circuit to deliver the “spin” and gave the same basic speech 5 or 6 times (at Merrill, with David Faber, with Cramer etc. etc.).
The initial talking points were gradually refined. The one refinement that jumped out at me was: the 1st set of talking points included a statement that the “debt offering was extremely successful and in fact was over-subscribed” (that was a big red flag). Within 2 weeks that talking point was gone and replaced with “we had to get the financing done quickly due to NAB shopping for a friendly judge” which then simply morphed into “ugly financing.”
Folks, don’t think for a minute that these talking points change by accident. Mel used exotic financing to buy a bigger house than we all could afford and now the rate resets are coming due in 2009.
Management’s inconsistent actions, failed execution, botched handling of the DC terminations, lack of substantive marketing or promotional campaign and seeming disconnect from retailers leaves me to wonder if this company isn’t speaking with TWO voices.
This management team needs to step forward now and present a precise, unified, detailed plan of how they intend to deal with the 2009 debt, how the shares from a proposed equity offering will be used and under what circumstances a reverse split will be adopted.
Statements such as “we will handle the debt opportunistically” (a later added talking point btw) is not going to cut it.
This company must now speak with one voice and for me that means I will need to hear from Leon Black as well.
The clock is ticking . . . .
The “S” is back in Sirius now!
Does that mean it starts going back up?
31 Cents!! Glad I invested 60K @ $3 in this POS!!! Thanks for all the positive comments about the merger Mel and your re-assurance of being fully funded and not seeking a reverse split. Go ahead and do a 1 to 50 RS and hopefully there won’t be any shares left to short. That won’t matter though with all the naked shorting on the street these days!! Oh well!! I am in it for the LOOOOOOOOONG HAUL now until Mel takes it private or goes Bankrupt!!! I have remained calm until this point but today I am pissed!!!
Share price talks and B.S. walks. Anyone can spin things in as positive light as they want but the real measure is the stock price.
BTW – I am anti-reverse split. That is a whole other subject.
r we not going to hear from Mel until December?
Or will we get some info from our CEO when the 3rd quarter numbers are released?
If the SP went down 14% on a day with no news, how much will it drop if we don’t hit 3rd quarter numbers? 50%
his silence reassures me what a piece of shit he really is. I mean come on .31 cents. Speak to us you fuck head.
I don’t think he knows what to say and he will be much more sure if he waits longer.
After the abuse Mel has taken on this board, he better be sure the next time he speaks or he may just get strung up by his nuts at the shareholder meeting in Dec.
MORE REPORTING/GUESSING
On Media
Market To Media Cos: Let’s Make A Deal
by Diane Mermigas, Wednesday, Oct 22, 2008 8:00 AM ET
Unusual circumstances, painfully low stock prices and a latent need to rearrange the media landscape could contribute to a new wave of deal-making amid the financial chaos and a protracted recession. The self-funded opportunists are beginning to gun their engines.
Deals will begin to flow again as a counter to the heavy financial blow of dramatically reduced advertiser and consumer spending. An incoming Democratic presidential administration and Congress may make it more challenging to concentrate industry economic power. Even joint ventures and strategic alliances may be stiffly scrutinized as evidenced by the delayed–and possibly denied–regulatory approval for the proposed Google-Yahoo advertising search deal. There are signs that the bottom-fishing has begun.
Despite players being spooked by frozen credit markets and deteriorating economics, there is plenty of available money from corporate reserves, private equity, venture capital and individual investors. Parting with funds in a volatile market will require more stringent rules of play. It generally will cost more to borrow under more rigid stipulations. Values will need to be reset, and new comparative price bottoms established. Earnings multiples will be reconfigured according to lowered forecasts. The pace of consolidation and asset spinoffs will accelerate over the next 18 months as equity and foreign investors increasingly put their billions on the line.
Rupert Murdoch says his company has $5 billion in cash, and he’s not afraid to use it. Liberty Media CEO Gregg Maffei says he and Malone see opportunity for lucrative financial engineering in deals acquiring cheap assets and cheap debt. With so many companies hitting new lows, and others trading lower than their available cash and marketable securities, funded players will not be able to resist unprecedented deals.
Any restructuring of Sumner Redstone’s debt and controlling ownership stakes in Viacom and CBS–funneled through his privately held National Amusements–could be a buying opportunity if he is forced to flip part or all of one of his companies. Both News Corp. and Liberty Media have indicated early interest.
Given their outstanding interests in satellite, it’s possible that either company could take a closer look at a $1 billion merged Sirius XM Satellite Radio or an alliance–if not an outright merger–between DirecTV and Dish. As owner of DirecTV and QVC, Malone might finally make a move for Home Shopping Network or another of InterActiveCorp’s newly spun assets.
AFTER HOURS…
After Hours Trade Reporting
After Hours
Last: $ .3121 After Hours
High: $ .3535
After Hours
Volume: 2,668,674 After Hours
Low: $ .31
After Hours
Time (ET) After Hours
Price After Hours
Share Volume
2 BIG TRADES
16:21 $ .3535 1,537,426
16:21 $ .3535 864,802
2 BIG TRADES
16:21 $ .3535 1,537,426
16:21 $ .3535 864,802
What a scam – I am sure those are sells.
hope we all see those big trades at 4 then at 3, 2, 1, now .30. I am so close to selling this crap and walking a way with 2500 bucks.
It is just hard to pull the trigger now.
Dow Skids More Than 500 on Profit Forecast Worries.
Talk about a rigged market. People just figured out that profits would be down??!!?! It’s almost comical. It would be comical if I wasnt losing my ass. Us little guys will never get ahead with the crooks on Wall Street and the Government.
finance.yahoo.com/
SIRI management seems to have little interest in assuring any share price benefit to common shareholders. With the conditions in the market, a reasonable expectation of a post reverse split result, would be the shorting of common shares into oblivion. I can see why Michael Harleib would consider legal remedies to actions of SIRI management. What has happened with the proposal to add billions of shares of stock does not seem to line up with what has been reported to shareholders.
WE are stuck in the mud till q3 results are out.. and I pray there good and we will learn about q4 and x-mass along with debt issues.. untill then there is no reason to buy or sell.. I got 20k shares at ave 1.29 peace
Sirius, XM technology would take years to merge
By PATRICIA SCOTT, AUTOMOTIVE NEWS
Mel KarmazinMel Karmazin, CEO of Sirius XM Radio Inc., said Monday that unified satellite radio networks and receivers are still in the distant future.
Karmazin made his first public appearance in Detroit since the merger of the Sirius and XM satellite radio companies was completed in July. He was the kickoff keynote speaker at the Convergence 2008 conference, hosted by Chrysler LLC. The conference focuses on vehicle electronics and customer needs.
In a question-and-answer session, Karmazin said the merger of XM and Sirius hasn’t resulted in a merger of satellite capability. Merging XM and Sirius technology and installing it in new vehicles could take as long as 15 years because of the new chips required and automakers’ lead time.
But the company is offering new efficiencies for its 19 million subscribers that will distinguish one brand from another. During their rivalry in recent years, Sirius and XM signed exclusive contracts with different automakers and brands.
“Building on the success of our audio entertainment and technology infrastructure, we can bring the relationship to a strategic level by partnering with OEMs to position new-vehicle launches with differentiating Sirius XM features, such as Sirius Traffic with Chrysler, XM Traffic and real-time weather with Honda, Sirius Backseat TV with Chrysler and Sirius Travel Link with Ford,” Karmazin said.
Karmazin, the former president of media giant Viacom Inc. and the former CEO of CBS Corp., focused his remarks on meeting customer wants and needs with the range of entertainment programming that Sirius XM offers.
With the value of Sirius XM stock down 75 percent since the merger, Karmazin needs the auto industry to help build new business.
“There’s all kind of content out there. At the end of the day, I think that the consumer is in a great position because people are going to listen to what it is that interests them,” he said.
“We are laserlike-focused on making sure that there is nobody out there that’s going to come close to having the content that we do.”
Karmazin, known for being a champion of shock jock Howard Stern, said satellite radio enables parents to block unwanted programming at a lower price with family-friendly packages.
Karmazin said Sirius XM will not expand into Europe and Asia. If another company wanted to use the Sirius XM model for content and delivery, he said, he hoped the company would be willing to pay cash for Sirius XM’s consulting and advice.
What should we do about off topic comments in the articles? I have created a topic in the forums so people can voice their opinions. I am inclined to simply delete or not approve off topic comments but, I will listen to the fans.
https://siriusbuzz.com/forum/showthread.php?t=921
. . . same story, different source. read last paragraph:
Sirius XM Radio Inc. chief Mel Karmazin said yesterday that the combined satellite radio service technology in cars could take as long as 15 years to become available.
The comment was made at the Convergence 2008 conference in Detroit, and the 15-year timeline is due to the new chipset required and automakers’ lead time, according to the industry publication Automotive News.
“At the end of the day, I think that the consumer is in a great position because people are going to listen to what it is that interests them,” added Karmazin (pictured above, alongside Ford Motor Company president Mark Field).
But during the 2Q08 conference call with investors, Karmazin’s timeline was somewhat shorter.
When asked about when interoperable radios would appear in OEM installations, Karmazin said:
“They [automakers] control the dashboard, so they can decide if they want it or they don’t want it, and if they do want it, you should assume it will probably take about three years for them to integrate it, since that’s the lead time that most of these options take before the car companies are willing to put it into production.”
still more . . . .
The National Labor Committee is claiming that women workers at the Kiryung Electronics factory in Korea, where Sirius Satellite Radios are assembled, face sweatshop conditions and is calling for a meeting with Sirius XM Radio Inc. management.
The labor watchdog group says that over 250 production line workers at the Kiryung Electronics factory “have no rights and are held under conditions of constant uncertainty and fear.”
They wrote a letter to Howard Stern, who lambasted Kathie Lee Gifford over sweatshop conditions in Honduras, asking the on-air personality to confront Sirius XM management over the treatment of workers at Kiryung.
The National Labor Committee will be attempting to meet with Sirius management (they claim this will be the third attempt) and will hold a press conference at Sirius’ NYC headquarters today, at 1pm ET.
Among the claims of abuse, the group says that Kiryung Electronics forces workers to operate 13 to 14-hour shifts, six or seven days a week, and earn just $145 a week.
last item . . .
. . . someone asked where the interoperable radios are that Michael Hartleib references in his lawsuit.
I think you will find one on Mel’s desk. Don’t believe me? Go look it up!
Mel said it! It’s a matter of public record.
Charles . . . the topic connection between my posts and the article relates to the “inconsistent actions of management” which is cited as a reason for the downgrade.
I will post elsewhere if desired . .
In Pictures: 10 Get ‘Em Before They’re Gone Gadgets
Read the full story Forbes staff
XM and Sirius Radio
Even if you have GPS, you’re not done pimping out your car yet. The Pioneer GEX-INNO2BK Portable XM Satellite Radio with MP3 capability ($139.99) can pivot between playing MP3 songs and XM radio. It’s also portable, so you don’t have to worry about leaving it alone at night.
SiriusHope…
.31 a share. What will it be 60 days from now?
Only God, The Shadow, and Mel knows what his agenda is.
So let me be the first to ask the question.
What happens when the stock is trading under a penny?
Are we transferred to the Micro Penny Stock Board? (MPSB) where is that traded? and where are they located?
Can’t wait to see how the hedge funds and naked shorts are going to short in the tenths of a penny, Or do they go to the 100’s ,1000,’s etc etc? and really make it difficult. Please don’t tell me they make it difficult.
SiriusHope…Being serious for a minute. It does not look good. I don’t know if we have 60 days. If other sectors report bad earnings it could drag SiriusXM down a few cents each time.
I guess it is a question you should ask Mel.
Maybe tha goal is a .05 share price. Reverse split at 50 to 1 and take it private.
who knows anymore???
imho
vaporgold
Roadkill,
I would rather see you paraphrase then post the whole article. You can make a comment and link to it… that is fine with me. I appreciate your non hostile rebuttal 😉
SiriusHope,
That was totally off topic and would have been perfect to post about in the forums or simply suggest the link to us via the contact form and we may write about it. Star a post in the forums and give us a link to that data so we can see it in context… or don’t if you don’t want to but, it sure would make more sense.
To all,
We are open to all comments, suggestions, and links so, don’t hesitate to drop us a line. If something is interesting for us to know about it… tell us personally! We rarely read the comments.
Since my first post, I have seen 1 off topic and one question… this is not the questions section of the site… it is the comments section!
If you guys have never used our forums before let me just say that you will not be sorry. The software we use has been used around the net for years and has become industry standard with millions of users… it didn’t get that way because it sucked!
GetItStraight Says: GetItStraight Says: These analysts are repeating some of the very same things that some of our own members here have been saying lately.
It seems as though many of you on here have what it takes to be a big shot analyst at one of these firms.
Get it, you obviously didn’t get what we’ve been posting on the Yahoo board for years about this company and Mel Karmazin’s shoddy management style. $107 million for Nascar? Martha Stewart? Karmazin’s blessing on the Clayton overpayment to Stern? Come on, people, get real. The writing has been on the wall for a long time and like it or not, this company is NOT recession proof nor is it bankruptcy proof. Mel Karmazin couldn’t give a damn about the shareholders and he’s proven that time and time again. The real doozy was Mel not having financing line up XM’s debt that would become due immediately upon completion of the acquisition of Sirius, which Mel knew about ever since he negotiated the merger back in 2006. The man is a moron and out of his league. Redstone was right about Mel, too bad none of you istened instead of spending all that time kissing Mel’ ass like he was some god or something.