May 2012 Car Sales Good, but Shy of Expectations
Investors should expect mixed headlines relating to U.S. car sales for may of 2012. While the pace is certainly enough to keep sales for the entire year above 14 million, it has fallen off from earlier in the year.
The SAAR in April dropped from above 14 million in earlier months this year to 13.8 million in May. For Sirius XM (NASDAQ:SIRI) investors the month of May also produces slightly mixed results. Whether we like it or not Sirius XM’s stock is sensitive to the headlines of the auto sector.
Despite auto sales in May being above 1,330,000, they were shy of the nearly 1.4 million the street was expecting. Year over year numbers look great, but it is the expectations of the here and now that define the sentiment.
For Sirius XM any number above about 1.1 million allows the company to produce decent metrics that will typically meet expectations. Given that fact, sales of 1.33 million are good news for satellite radio, despite the issue of sales being below expectations.
Ironically, the tempered enthusiasm for auto sales may be a blessing in disguise for the satellite radio provider by easing the pressures to increase the current 1.5 million in subscriber guidance any further. As has been noted many times before, Sirius XM trades at a premium in a time when stocks that trade in premiums are not appreciated. Managing expectations, and thus the premium is likely a very healthy thing for Sirius XM right now.
I always get confused when people say SIRI is trading at a premium. They say it at $2.40 and now you are saying it at $1.84….um…so which is it?
wuw…..
At about $1.84 it is at the bottom end of the premim scale.
Look at ev to ebitda.
When SIRI is trading at a multiple above 15 it is at a premium. Actually, compared to other media companies even 15 is a premium.
Would a share buy back drastically change these premium levels? Because the massive float is what everyone seems to blame for the low share price.
Mel got his payday. He appears to have overplayed his position….again. Malone will drive the company in a more shareholder friendly way.
I dont understand the Mel bashing. I really dont. He has steered this company thru the longest merger delay in history. Thru the worst economic crash since the great depression. He didnt declare bankrupcy like so many other good companies did. Would you all have been happier to have been wiped out in 2009? Anyone who held during that period and is bashing Mel now needs to have their head examined IMHO. Seriously.
Even now, Mel is the ONLY thing keeping Liberty from steamrolling current shareholders. Liberty is playing hardball….and i dont care what anyone says…when outside forces are playing hardball, i am glad we have Mel on our side. I am confident, that no matter what happens, he is gonna get us the best deal possible. It wont be perfect, but it will be better than if he wasnt our CEO and Liberty just had their way.
In the end, a Liberty control is a good thing. Its just how we get there. Mel is going to make sure its not as one sided as it would be without him. Just saying.
He had two big things to accomplish. Merger took too long. Probably not his fault. Refinancing after merger was a disaster. It cost him the company. Not bashing just a huge payday for so so work.
Probably not his fault? The merger delay was DEFINITELY not his fault. And as far as financing is concerned….there was NO CREDIT avsilable during the economic crash. None. Zip. Nada. Mel had to dance with the devil because it’d be bankrupcy if not. No banks were lending to Anybody. Companies were going bankrupt left and right.
Am i glad Mel struck a deal with Liberty? Yes. Otherwise i would have lost my original investment. I was in at $6 and was able to avg down to below a buck and cash out green in 2010. I got back in at .99 cents in 2010 and have doubled my money so far. My sell price was at $3, thats why i didnt sell last May at $2.40 or again this past April at $2.40.
It sucks being down here….but once this Liberty Deal is done, i am confident we will see new 52 week highs again. Just gotta wait it out.
If i wish Mel had done one thing when making that deal with Liberty for their 40%? it’d be that he didnt out in an expiration date on the poison pill. Otherwise Liberty would have HAD to offer a premium tender. But who knows what was going on during those meetings in 2009. It went right down to the wire. Those loans were due that day. So i am sure Mel tried everything he could. Malone just had the upper hand then.
But now is different. Sirius is kicking a$$ as a company. Yes, Liberty is free to buy as many shares on the open market to gain control. There are no restrictions there. HOWEVER…Malone wants to do an RMT…and to do so, he DOES need Mel, the board, and Siri Shareholders to go along. Hence negotiations are taking place as we speak.
Personally, i have faith that Mel will get the best deal possible under the circumstances this time. Place your bets. We just gotta wait and see…
Two things. More concessions out of the box may have helped the merger. Secondly, Mel passed on more than one opportunity to refinance. Mel blew the two biggest points in the companies history.