Ralph Nader Is Active On SiriusXM – Is He Right?
Activist Ralph Nader was very vocal right out of the gate when Liberty Media made its intentions to take over SiriusXM public. In fact, it seemed like only a matter of hours went by when Nader called the offer ludicrous. This begs the question of whether Nader actually took the time to really study the offer, or instead dismissed it as a matter of course because perhaps he is too passionate about his investment. Today, Nader is on a letter writing campaign of sorts, contacting major institutional investors, speaking about lawsuits, insinuating unfair ex-parte communications with major holders, and insinuating things like Sirius XM on the verge of paying “regular dividends” and about to announce price-earnings ratios. I get what Nader is trying to accomplish. I really do. However, there is also a dis-service in what he is saying. Here is one letter:
January 14, 2014 F. William McNabb III, CEO Vanguard Group, Inc. P.O. Box 1110 Valley Forge, PA 19482-1110 Dear Mr. McNabb, As a shareholder in Sirius XM, the offer by John Malone to buy out the 47 percent interest that his companies do not own came in well below the value of this growing company. Sirius is rated 4 stars by S&P, with a buy recommendation. Moreover, last week, Leon Cooperman, founder of hedge fund Omega Advisors, Inc. – a major holder of Sirius XM shares – declared, “We think the offer materially undervalues Sirius.” Your Fund is listed as one of the top institutional investors in Sirius. Under Delaware law, John Malone must demonstrate that the Special Committee is “independent” and that a majority of the minority has been secured before making its decision. I am writing this letter to urge you to reject this inadequate offer. More information is needed to allow the shareholders to determine how inadequate Malone’s offer is. That presumably is one of the objectives of the shareholder lawsuits that soon will be filed in Delaware’s Chancery Court. Your fiduciary responsibilities, of course, run only in one direction, and that is to protect and improve the values and rights of your shareholders or investors. For your individual savers, this point can be phrased as maximizing the returns on retirement accounts and other savings accounts on Main Street, USA. When a majority shareholder like John Malone, Inc. makes a move to acquire the remaining shares, in this case through a stock exchange, the majority shareholder’s representatives often contact the large institutional shareholders before the public announcement to get their reaction. This seems to be an unfair ex parte contact that can disadvantage individual minority shareholders or investors in your fund, especially since the institutions may hold a majority of the minority shares. Were you contacted before the announcement directly or indirectly by the Malone interests? Kindly respond. Obviously, all remaining shareholders of Sirius want to maximize their returns. The company is expanding its subscribers impressively, building up cash flow, and reducing its debt. It is about to register better price-earnings ratios and may commence regular dividend payments. Mr. Malone’s strategy is obviously to catch this advance early and low, to maximize his commercial values afterwards. I urge you and other large institutional shareholders in Sirius XM to actively oppose this ludicrously low purchase offer in fulfillment of your solemn fiduciary duties commensurate with your influence. Sincerely yours, Ralph Nader PO Box 19312 Washington, D.C. 20036
Here is my critique of what Nader is doing:
1. Nader calls the offer inadequate, but offers up no real evidence to support his stance. His evidence is that the S&P rates Sirius XM as a 4 star investment and that a hedge fund says that the offer is inadequate. These examples do not really cut the mustard as convincing evidence that the offer on the table is bad. What does S&P rate Liberty as? What does the hedge fund rate Liberty as? Right now Liberty has a mean analysts target of about $173 per share without this deal. The high target is an impressive $220. The low target is $138.
2. Nader does point out Delaware law, but then again, so did Liberty. “Under Delaware law, John Malone must demonstrate that the Special Committee is “independent” and that a majority of the minority has been secured before making its decision.” This is quite true. It is why getting the proper information is critical…not shooting from the hip.
3. Nader states, “More information is needed to allow the shareholders to determine how inadequate Malone’s offer is.” I agree with Nader that more information is needed, but I challenge Nader to show me exactly why he feels this offer is inadequate. I challenge him to deliver something concrete himself rather than simply adding to the hyperbole. The attitude of “The offer is inadequate because I feel it is worth more” holds about as much water as a spaghetti strainer. I have seen this type of response from many people. If you are going to be amendment with a vote NO on this, you better have something concrete to back up your amendment feelings. I get wanting more information. I do not get these people saying no when they do not have enough information to really assess.
4. Nader states, ” That presumably is one of the objectives of the shareholder lawsuits that soon will be filed in Delaware’s Chancery Court.” Indeed, these will be filed, but is this letter about getting information to make an informed decision, or about riling up support of the sheeple investors out there that will glom on to any conspiracy theory.
5. Nader state, “Your fiduciary responsibilities, of course, run only in one direction, and that is to protect and improve the values and rights of your shareholders or investors.” I agree. and for Ralph, a person that clearly lacks the information to make an informed decision (as we all do), how can he (or anyone) arrive at the conclusion that the deal may not be in the best interest of shareholders. It very well could become a much more attractive investment moving forward. Simply stated, we need to know more before jumping to a conclusion. I had a communication from an investor that labeled Live nation as “garbage”. I asked a very simple question…”what is the market cap of Live nation and what was its performance last quarter”. The person had no idea, but labeled Live Nation as garbage. Kinda funny.
6. Nader defines the responsibility of a Board to maximize and act in the interest of Main Street USA. This is about as big an untruth that is out there. The Board acts in the best interest of shareholders PERIOD. Be it you, me, or an institution.
7. Nader states, “When a majority shareholder like John Malone, Inc. makes a move to acquire the remaining shares, in this case through a stock exchange, the majority shareholder’s representatives often contact the large institutional shareholders before the public announcement to get their reaction. This seems to be an unfair ex parte contact that can disadvantage individual minority shareholders or investors in your fund, especially since the institutions may hold a majority of the minority shares. Were you contacted before the announcement directly or indirectly by the Malone interests? Kindly respond” – This is a classic case of making the big guys bad guys. Of course the concepts of transactions get floated by big players. That is one of the perks a big player gets. It is how the market works. Would it have changed the dynamic in any way if Vanguard was asked some questions? NOPE
8. Nader states, “Obviously, all remaining shareholders of Sirius want to maximize their returns.” It could be that getting a deal done is the best way to maximize returns…AGAIN…we do not have enough information yet to render such a decision.
9. Nader states, “The company is expanding its subscribers impressively”. That is in the eye of the beholder. The facts actually show that the subscriber metrics are constricting and not expanding. Yes, sub numbers are going up, but the rate of growth is flattening out. This statement by Nader flies in the face of reality. I am not saying that SiriusXM will not grow from here, but the subscriber additions are getting lighter.
10. Nader states, “the company…is building up cash flow. This is true.
11. Nader states, “the company is..reducing its debt” This is a half truth. The company reduced some bad debt, but has also taken on new debt. It has been levered to about 3 times EBITDA for a while now.
12. Nader states, “It is about to register better price-earnings ratios and may commence regular dividend payments” I take exception to this statement. It is simply not at all very accurate. The price to earnings ratios have been pretty consistent for quite some time. The real problem here is the dividend statement. The company is likely not anywhere close to dividends. The company is in the midst of a massive share buyback program that will last quite some time yet. Dividends are not likely on the horizon for years. Making this statement just shows that Nader likely has not really been closely following this equity, which begs the question as to how Nader can assess this situation.
The bottom line here is that Mr. Nader seems to be trying to rile up the sheeple into arriving at a totally uninformed conclusion. I get that there are those that have studied what is available and arrived at a preliminary decision. SMART….let me repeat that…SMART investors are still assessing the situation, not arriving at rash conclusions based on hyperbole. It is my opinion that Liberty will need to sweeten the offer to get a deal done, but I am not about to say that a deal is bad. Sorry Mr. Nader, but you are WAY, WAY, WAY off base here. You would have much more traction in campaigning for more information for investors to consider.
Spencer,
It might be a good idea to take a look at the EV/EBITDA multiple now that we should be trading on 2014 guidance. That will probably show that we are at the very low end of the trading range. That tells me that Malone decided to make an offer at the historically low end of the trading range based on the 17 to 24 multiple range.
Denco…
I have done just that
http://seekingalpha.com/articl.....-sirius-xm
The offer is right in the sweet spot where SIRI typically lives on the multiples.
Thanks for pointing that article out to me Spencer. I had not seen it.
I have a couple of questions/observations on the #s used to calculate your multiple. Firstly, does the debt amount you are using include the revolver. They have already levered up for the purpose of buy backs and refinancing at lower rates. Is this taken into account in you cash assumptions. If the revolver is added to the debt side then it needs to be taken out of the fully diluted shares side. Secondly, does your share count take into account the shares repurchased from Liberty in November? A swing of a couple hundred mn shares or a few hundred mn dollars will drop that low multiple into the 17-18 area quite easily.
Of course if the accelerated buy backs during this down turn the # of shares outstanding would be even lower. If they did not buy back during this 20% correction they are fools and it shows just how much control Liberty has over SIRI management/puppets.
denco….
The debt amount, as well as the cash amount bot carry the value of the revolver.
The cash assumptions are best guesses. We can have no idea where it actually stands at the moment.
Share count uses assumptions based on my best guesses at the moment.
The Liberty shares would have taken 44 million shares out. It would not move the needle substantially
Which tells me he has had a hand in beating this stock down by controlling the news flow or lack there of concerning SXM and the recent Agero acquisition, clarity on the GM deal, probably holding open market purchases etc…once he got his 20% correction he pulled the trigger at the low end of the range. That does not sit well with me and most SIRI investors. I am also an LMCA share holder BTW.
denco….
Whether or not they had the cash to buy back Liberty shares and tap the market is unknown. There are a few days in recent weeks where I suspect they were buying. The argument that they may not have been buying to help Liberty loses weight when you consider that every open market share bought increases Liberty ownership
What about the value of the NOLS and Spectrum long term. These assets are not part of the valuation model but do indeed add tremendous value to the company, At some point in the next 6 or so years, the SIRIUS side of the spectrum will no longer be need as all radios will receive the XM feed, correct?
denco….
The NOL’s still will have value, as will the spectrum. None of this is going away even with a deal.
needed, not need.
This will free up this asset for other opportunities/buyers, right.
Spencer Osborne,
If you are going to tear Ralph apart on every word he writes, then at least use spell check before you make your public reply tearing his words apart. I for one am glad he’s very outspoken and I am worried concerning this deal and my investment. How can there be so many recent upgrades, then a few days later a low-ball offer like the current one made?
For possible dividend payments, don’t forget the dividend that was paid out last year as a one time deal before tax laws changed. Funny how they can afford that and the stock buy back, but cannot afford a fair premium price for shareholders to purchase this company and give everyone a fair deal for their patience and trust in their investment.
Thank you Ralph Nader!
From one of the little average investors who appreciate your help in this unfair deal, I’m glad you are in our corner.
I am an average person who makes about $75,000 a year and I try to invest in companies like this to raise my income and soon get to retire and be financially secure as I grow old. I don’t want to work until I die or just get by, I want to invest in winners like this company and be rewarded for it, I’ve been here since .05 and always expected this company to flourish. I also expected this company to be loyal to it’s investors, both big and small.
‘m glad a person of power and public voice like you Ralph Nader is speaking out about this deal, if there’s anything the average investor can do to help please come forward and let us know.
Joe T.
Ralph Nader is essentially being a MORON here. He comprehends next to NOTHING about this issue.
As for the dividend. It was a ONE TIME dividend because it was TAX ADVANTAGEOUS. If you followed this equity CLOSELY you would know that. HUNDREDS OF COMPANIES did the exact same thing. They did it for ONE REASON. It was tax advantageous.
With all due respect to your opinion…Ralph Nader is a satellite radio MORON. Who in their right mind would throw out a deal that can potentially reward you a lot more than you would otherwise get. Bear in mind, this deal is not there quite yet, but NADER is clearly speaking from his posterior.
The reward side of a deal can be quite rewarding….but Nader thinks that there is no synergistic value moving forward. Nader is misguided in a major way.
YEP….Look for dividends in about 4 to 5 years at the earliest. If you are thinking they are around the corner, fire your financial advisor, because they have no clue about how to assess this company.
Spencer, After the deal is complete as an investor why would someone want to buy c shares when they can buy a shares(with voting rights) at the same price, or will a and b shares be the same cost as c shares. P.S. that’s what I don’t understand.
James….
That is a key question that we need to be asking. At the moment, I would prefer to trade the A shares. I think institutions might have the same thoughts. One thing we need to understand is what exactly falls to the category of C shares from LMCA
Spencer,
If you thorw at Nader, who is quite a respectable person in this country, such names as a “moron”, I can say with as much confidence that all you are saying on this matter is a bunch of demagoguery.
What is your point? Do you agree that $3.68 and non voting shares is a fair offer? Or you are, like any demagogue, are trying to be politically correct and serve your readers a bunch of nonsense showing them zero respect and,using your favorite terminilogy, treating them like morons .
Siri fair….
Simply stated, I would expect a lot more from Ralph Nader rather than jumping to conclusions, and worse, making insinuations that are not reality based. He should be above that. What he is doing is turning himself into a Nancy Grace. He is playing sensationalist. REAL people that deserve respect do not need to do that.
The offer is a ratio. It no longer stands at $3.68. It now translates to about $3.46 or so. I have stated from the beginning that I think the offer needs to be sweeter. I have said that the voting issue may be a big sticking point. I also realize that a satellite radio investment will continue as this moves forward. Thus, in escorts are not being asked to walk away from the investment. If investors were being asked to walk away, the argument for a better premium holds more water.
Nader simply reacted, or better yet, over reacted without having all of the information to consider. Simply stated, he should have been above that, and was not.
Sirius XM does not need to merge with liberty. In five years sirius would have about 4B shares and fcf at $2B+. The company would be valued conservatively at $40B with a share price at $8+. Why do I need liberty and its uncertainty if I can do without it and see my stock appreciate two times (very conservatively, not accounting for darling overtones and market hype and even without agero contribution)??? I an rosy scenario, if we account for reasonable telematics impact on revenue and fcf, the stock could be at $10+ in five years. Why would I need liberty??? Prove me wrong!!!
Siri fair….
Libery owns over half of the company now, and in a few years (this offer set aside), would own perhaps 70%. You may not feel you need Liberty, but the fact is that you already have them.
Spencer,why does it seem you come off,loving the so called fact that Nader is a Moron,seems you would be upset if this Moron was correct.It’s like you are hoping Malone get’s Siri for as little as possible and then that would make you happy,just saying that’s the way I see it.
Luke….
Nader is not a moron. He us simply acting like one with this issue.
Nader is not correct in many points, and us not correct in sensationalizing something that needs clarity and not added added confusion. If he were trying to help get to a real meat and potatoes offer, he would cease the sensationalism.
I do not hope Malone gets Sirius as cheaply as possible. I hope that a good deal is struck that will allow me as an investor to maximize returns.
Spencer, I have to say that calling someone like Ralph Nader a “moron” is out of line for you, who otherwise writes very informative articles. Not sure why you had to get in the gutter like that…quite disappointing.
Boomer….
Not to split hairs, but there is a distinct difference from saying someone is exhibiting moron behavior and calling them a moron.
Nader is an intelligent person. With regard to this issue, he is being a moron.
I am sorry, but he is not being an advocate when he wrote what he wrote. He is sensationalizing.
Spencer,
I would love to see how you would react if someone called you a moron. Nader is right. Without people like Nader who do care we, the small guys, get screwed routinely.
Since you are using names why don’t you call Maffei and Malone sharks or monsters that would devour anything they can grab or steal? They are trying to steal the company; anyone with a brain can see that.
It is a pity that you are taking us for morons as well trying to prove us that we are offered a good deal as if we cannot add two and two. The deal they are trying to shove down our throat is not only s$&#%^ but I, as a relatively large investor, can lose hundreds of thousands of dollars to this deal. Who do you think will pick up these dollars other than Malone and his henchmen? Using your eloquent language this deal will screw us to the tune of potentially half of our holdings. I just wonder where your bias is coming from!!!
Siri fair….
See below. Someone has called me a moron.
The company is not being stolen. It will still exist, and we will still be invested in it. Malone is screwed. I have said it before.
I did not say that we were offered a good deal. In fact, I have stated several times now that I feel the offer needs to be sweetened. I can not help it if you can not comprehend that.
You are going to lose hundreds of thousands? If that is the case, you must already be down hundreds of thousands. I am sorry that you are in that position. Again, you will still have your investment. Show me where you are losing hundreds of thousands, and we can have a rational dialogue.
The crusading attorney first made headlines in 1965 with his book Unsafe at Any Speed, a scathing indictment that lambasted the auto industry for producing unsafe vehicles. The book led to congressional hearings and a series of automobile safety laws passed in 1966.
Spencer, what were you doing in 1965??
Very sad to hear you bash this American ICON!!!
Rob…
There is a distinct difference between being a moron and acting like one. Nader us a very smart guy. On this issue he stepped off of the reservation and moved toward sensationalizing. He simply is not being the classic Nader. He has turned into a Nancy Grace on this.
1966 has really nothing to do with this.
Blatantly self promotional posts=that’s what you write,you MORON
Luke….
Sorry you feel that way. I don’t think I promoted myself, but you are certainly entitled to your opinion.
Do you think Nader was right to say this company is about to issue dividends?
Do you think Nader was right to speak of subscriber growth when it is actually slowing?
Do you think Nader was right to say the the EPS to price ratio was improving?
Do you think Nader was right in saying debt is decreasing when that is not really the strategy of the company?
Answer these honestly.
Do you think Nader was right when he says a board has a bigger responsibility to Main Street when the responsibility of the board is to all shareholders equally, Main Street or Wall Street?
The crusading attorney first made headlines in 1965 with his book Unsafe at Any Speed, a scathing indictment that lambasted the auto industry for producing unsafe vehicles. The book led to congressional hearings and a series of automobile safety laws passed in 1966.
Go ahead and delete this post as well.
Spencer, your actions will bring discredit to your name!!
Rob….
Naders history is fine for the most part. On this issue he stepped out of bounds. He went from fact based activist to sensationalized Nancy Grace type reporting.
Had he stuck to the facts, I would have applauded the effort. He did not. I called him on it.
Delete your post? From what I see none of your posts were deleted. Are you insinuating something here that does not represent reality? Have I deleted any if your posts?
Ralph Nader Florida 2000 vote count 97k
Bush over Gore by 187
yeah i think moron fits
Spencer,
To placate you, I am not down. I am folds up. My holdings are very significant because I bought the core of my investment right before liberty bailed them out. I took an enormous risk in the face of all odds and opposition of my family. A significant part of my shares are at a price in single and very small double digits. One may say, “Hey, he made his money, why complain”!!! Yes, I did make my money but in my case the risk and reward are matching unlike in the case of Malone. Yes, if Malone gets siri at these current terms I will lose hundreds of thousands if not more from my current position where I got through hell.
Why do you keep being so perniciously politically correct? No one is denying you a lot of knowledge about the company and a decent understanding of its potential and future, be it short, medium or long-term. Have the guts to tell your readers what, in your setting of fairness, the terms should be to make sure that siri investors would benefit. To get respect from your readers do not be a coward hiding behind words like “sweeten the deal” that mean nothing.
Malone will never get to 70% of siri because the last share he would want to get will be too expensive for him, per Maffei. Also, siri investors will never let the company go on a share buying rampage to get Malone to 70%. This is criminal and someone will end up in jail. What most of people like you fail to realize that we are living in a world that keeps changing for the better in terms of protection of investors and their rights. Believe me it may take another ten years and if anyone accepted proposals like Malone’s that would be criminal. It is just a matter of time.
In the meantime, tell your readers what, in your opinion, will make the deal fair for us, or you do not have one!!!
Siri fair….
You do not need to placate me. You stated that you would lose hundreds of thousands. You now clarified that to say that such a loss is simply in your imagination. That may be harsh, but from what you have stated, you are imagining the loss.
Let’s look.
You say you are up big in the equity.
You say that you got most of your shares below $1.00
Thus, if the current deal went through, you would have new shares valued at about $3.50.
If you bought in the range you did, and were to exchange at $3.50, I fail to see how the deal going through loses you anything. In fact, what I see is that on the day the transaction happens that you will still be up the same amount as you would have been the day prior.
You then go on to say I do not have the guts to speak to what is a fair offer. Excuse me, but I have discussed where I see this going. I see the exchange ratio getting toward about a 10% premium! or near $4, or that ownership in the new entity will get from 39% to about 42%. I do not know how much more clear I could be. If you say that is cowering, you are sadly mistaken.
What I have said is that we really need more information to consider. Will the c shares be just Sirius XM, or will they include something else? That is a big thing to consider. What I do not do is sensationalize this and create something that flies in the face of realistic thinking.
You sensationalize your position saying that this will cost you hundreds of thousands. The only way that seems to happen is that the company goes back to well below a dollar. In that case, Malone is losing billions. Do you think that it is reasonable to assume Malone wants to lose billions? Perhaps you do. I do not. The fact is that your statement about losing hundreds of thousands is your own made up scenario.
This latest round of buybacks has $2 billion dedicated to it. $500 million is going to Liberty. What do you think happens at the end of that? The liberty stake increases on a percentage basis. The next round of buybacks may involve no liberty shares being bought. Again, his stake would increase. This would not send anyone to jail. Malones percentage would increase, as would yours, mine, and anyone else that holds shares.
Many of my insights get published for my members. They get more than regular readers. That is the way it works. Despite that, I have expressed a good deal to regular readers.
Spencer,
You do not need to analyze what I have and ow much I am going to lose. This is my money and I will be losing from my currecnt position , not from five years ago. The rest is NONE OF YOUR BUSINESS.
As to your funny price of about $4 and premium of 10%, this is an insult and you actually discrediting yourself and your previous work. Why in the world a company with an average $4.60 valuation by analysts for 2014 should be selling for this money. You yourself expected about $4.25 in the first Q of 2014. This reminds me of chameleon behavior. Again, you are taking us for morons and dancing at the piper’s tunes. I was right
You told us you would lose hundreds of thousands, now you are saying it is none of our business. No one asked, you just decided to divuldge your information.
$4 might not be ideal but it is sure as shit better than $3.68! Spencer is looking for .32 more than the original offer. You think they are going to realisticaly up the offer by a dollar? You’re nuts.
Your perception of losses like Spencer’s is funny. Why in the world I would vote for a deal where I am losing money from my current position. It appears you are nuts!!!
Another joke of yours is that liberty mighty be merciful by raising its offer to $4 (while two months ago it was well above $4)and do us a favor. This rotten “philosophy” is worse than a joke, this is outright STUPIDITY. It is like you want to buy something from me and I tell you the price that is double the market, and then graciuosly offer you a 10% discount. Damn! How stupid!!! What a joke. This is why the market is full of psychosis and hysteria where people refuse to think straight and run scared as if the world were collapsing.
But, you’re not losing money from your current position. I’m not going to argue with you because you don’t even understand what I am saying.
“Another joke of yours is that liberty mighty be merciful by raising its offer to $4 (while two months ago it was well above $4)and do us a favor.”
WAS is the keyword there. What if Liberty makes the purchase and your converted stock goes up 100%? I don’t think you understand that your investment could just as easily reach all time highs after the conversion. All you are doing is converting your stock from one to another.
siri fair…
With all due respect….and I am not trying to be a jerk.
You stated that you would lose hundreds of thousands of dollars and gave some information as to your entry point. I simply pointed out that your “loss” is in your imagination. I realize that sounds like a harsh thing to say, but it is reality.
There is no realistic way that you lose hundreds of thousands of dollars if this goes through….at least you have not spelled out any reasonable way that this happens.
You are….AGAIN….Looking to get valuation TWICE. I am not sure how else I can explain it.
Do you think that analysts will suddenly say that $4.50 is no longer their 2014 price target? No….they wont…at least not necessarily.
The future value DOES NOT EVAPORATE
YOU STILL HAVE SHARES AND WILL STILL REAP THE REWARDS OF SATELLITE RADIO
Do you see that you are asking for future valuation TWICE here? You want to get paid up front on future valuation, then also get that future valuation when it comes to fruition over time.
Let me try it this way.
You hold 4 quarters and Malone holds a $1 bill and 3 pennies.
Malone wants to have the 4 quarters.
He could walk down the street 5 blocks to a bank and exchange it, or he could offer you the $1 bill and three pennies for your 4 quarters.
You say that your 4 quarters are worth more because the bank will give you a nickle in interest 1 year from now.
Malone would be a fool to pay you the extra money, because even with the $1 you are STILL going to get the nickle in interest a year from now.
You are asking Malone to pay you what the bank would even though you are still going to get paid from the bank.
Double dipping is simply not in the cards.
Spencer,
Since you are so fond of comparisons, here is one. I and a friend of mine bought a painting as an investment ten years ago for $1M. His share is 53% and mine is 47%. Today, the painting is worth $5M and experts believe, since the artist is becoming extremely popular, in three years the payinting may be worth $15. I have no plans to sell the paiting. My friend offers to buy me out for $470K plus 3%. Do you think I will sell?
SIRI fair…
This comment demonstrates that you still are not comprehending what is happening.
In you situation, you friend is not offering to buy the painting and it will never be in your possession again. A better example:
You and your friend buy a painting for $1 million. He puts up $530k and you $470k.
The painting spends 6.5 months at his house and 5.5 months at yours. However, he dictates what days you get the painting as well as where you can hang it. Further, he dictates what insurance you need to carry and just about anything else. It is now worth $5 million.
Your friend wants to have this painting at his house for 12 months.
He offers you half of the current value (2.5 million) for allowing him to keep the painting at his house all of the time. However, you still own 47% of the painting and can reap those future rewards.
It seems that you do not understand that you would still be invested in Sirius XM and participate in the rewards that investment will deliver.
Liberty already controls Sirius XM. It controls the buybacks. It controls the acquisitions. It controls the deals Sirius XM makes. In fact, Liberty Media, not Sirius has the satellite radio licenses for SDARS.
From a deal standpoint, being under the liberty umbrella creates far less tax leakage. It also allows for Sirius XM’s cash flow to be utilized to further enhance overall LMC value, which would include your stake.
Cut to a couple of months from now — SIRI converts to LMCA, sirifair6’s investment grows by 50% — he yells woohoo — all is forgotten.
Maybe Nader wants to get his own show on SXM. How about the new business channel 111? Hosts and programs, no spots and few promos. Good launch and info
Spencer, While Ralph Nader may have stepped out of his bounds when commenting about the inadequate deal he believes that Liberty is offering SXM shareholders, your characterization of his comments was unprofessional. We all have moments like this far be it for me to chastise you on this but you would be well advised to take a deep breadth before you go down this road again. Be Well.
Heady….
I would have left it alone. He had an initial reaction….I get that. Then he went and penned letters to institutions that were essentially Nancy Grace type sensationalisms. He then goes further to try to firm a group based on his nonsensical understanding of this yet says he will be in the background.
Nader could have had potential to do something real. He screwed it up by becoming a Nancy Grace. No, no institution will really take him seriously.
At the first step it was a brush off. Everything after that was, to use his term, ludicrous.
I like the 4 Quarters and $1 analogy to a point. Here is the problem I have with it. 2 Months ago I had 4 quarters and 2 dimes. He sent his hooligans over to my house over and over in to harass me and finally ended up taking my 2 dimes. Once my 2 dimes were gone he then came in to make an offer for my 4 quarters knowing that he only wanted to offer the $1.03.
The value that he is offering in under the recent value that he manipulated down from a recent $1.20 to the number he wanted to offer. Therefore, it is a manipulated takedown offer and should start at the $1.20 which would not take into account any “double dipping, rather the true value before the hooligans came in to basically drive the price down.
$4ish and voting rights should be the area where a deal can be made.
What about when he manipulated it down for buybacks and you got to load up the truck and sell for profits? Was that OK?
I hate when people manipulate stock — except when it makes me money ;-P
Denco…..
Every once in a while Sirius XM, IR any equity, will make a run and pop. It was clearly not ready to be. Worth ‘4.18 yet, or it would have held.
If you do the EV/EBITDA valuation, and look at a multiple of 20, you will arrive at a pretty fair value. Anything above that is “over valued” and anything below is “under valued”
An example…
If Sirius XM announced that rush Limbaugh was coming tomorrow, the stock would rocket up to $4.50. It would not hold that though. It might come back down to $4.
The value of a stock is what the market will pay. Speculation that the company can perform will allow value to increase
Question Spencer, when SIRI shares are converted over to LMCC do all aspects of Sirius XM transfer over too? For instance, does Sirius XM become a privately owned company and no longer publicly owned? When the conversion happens does all the debt follow over to LMCC or does it stay with Sirius XM?