RBC And Barclay’s Weigh In On Sirius XM
Now that there has been a ton of news on Sirius XM Radio, the analysts are once again getting to the business of issuing reports on the company. The infusion from Liberty has not only given Sirius XM new life, but investors as well. After months of doom and gloom, there is actually news that can deliver a positive outcome.
RBC analyst David Bank see the $530million investment from Liberty Media as a positive that helps SIRI avoid bankruptcy by addressing 2009 debt refinancing obligations. However, Bank considers the deal extremely dilutive to existing shareholders via preferred convertible shares to be issued to Liberty (for free). Bank estimates that the share count will come in at 6.2 billion. The firm maintains a sector perform rating, and still has not established a price target.
Vijay Jayant of Barclay’s issued a report focusing on Liberty, but for obvious reasons included a section on Sirius XM Radio. Jayant believes that the Liberty Capital (LCAPA) loans to Sirius XM give LCAPA upside optionality and downside protection. He notes that the 15% terms of the deal are attractive for Liberty as the carry a senior capital structure position. In the analysts opinion, Liberty’s investment is more for a financial investment, and will not involve Liberty becoming closely involved in the day-to-day operation of SIRI, nor does it plan to attempt a DTV/Sirius operational or financial combination.
As the Liberty news sinks in, and the street awaits the Q4 report, the equity is hovering at levels slightly above 12 cents per share.
Position – Long Sirius XM Radio
I don’t believe the deal with Liberty will ever reach fruition. At least let’s hope it doesn’t, because it is even worse that the “toxic” financing completed at the time of the merger. My hope is that the company is just buying themselves time and treating this as a bridge loan until a better deal can be found. The Liberty deal, if it goes through completely, is an absolute train wreck for Sirius investors.
Fully agree.
So if RBC is right, $300mm EBITDA for ’09 thus translates to what, $0.0484?
Next year’s growth of say 15%? 1 X next years growth = 15.
15 X .0484 yields $0.7260 sp
anyone agree/disagree?
Sounds reasonable to me. The shorts weighed on the stock once again, but I think we will get some volume and life once they announce when they will report 4Q CC. It should be on Thurs 2/26 prior to market opening, in my opinion.
Whats up with all these analysts not giving price targets for Sirius. This is like the 4th ones so far. What gives? It’s their friggin job for crying out loud – they’re ANALYSTS!
Lol.
It’s like everyone is afraid to stick their neck out or something.
Can’t say I’m surprised … all the analysts that gave well reasoned thought out price targets in the past were outdone by the clowns that somehow picked the right stock price despite making all the wrong assumptions about the company’s performance.
Friggin.. glad to see you posting again
Maybe we are better off if they don’t give price targets. Considering the fact that SiriusXM has never made any money, and the fact that shorting has been a lifetime career to most hedgies when it comes to SiriusXM.
What’s the point?
imho
vaporgold
An analyst uses some degree of logic when making a prediction. This stock defies logic and is purely hedgy mob ruled. That’s like an olympic ice skating judge giving picks on an ultimate fighting match. I don’t blame them for not giving targets.
Just remember you only have a few more days left to win the new Slacker.
Tweet Tweet
Just like charles said, its like sony offering a free cannon camera on their website.
I wonder what his real motive for that was and how many visitors that were considering sirius xm changed there mind…probably in the dozens to hundreds. And then using the rule of 7 degrees, probably equates to thousands, all for what? offering 1! person a free gift.
you do have to hand it to slacker to do this….give away one slacker and get all this free press.
Charles is a blogger. He has no obligation to “pump” Sirius.
One of the problems I have with a certain breed of Stockholder is that they seem to think that negative press about Sirius is “a conspiracy”. I’m glad to see Charles post against the grain. Sometimes I think Brandon and Tyler think too much like the stockholders and not as the fans of the service. It’s why I usually like Orbitcast better than this blog, because I remember Ryan is a fan of SatRad and the stock price is secondary.
It’s possible to like SatRad, Regular Radio, HD Radio, and Internet (Slacker) Radio.
If people are so desperate that only “positive cheerleading” posts are good, there’s a fundamental flaw in that thinking.
You all should wonder about the company you are investing in not providing me with basic info or responding to that Slacker post. Sirius is totally inept but, you guys already know that, which is why you lash out at me when I try and give something away to my readers.
You can question my motive all you want but since the start of this website 3 years ago I have yet to receive 1 single kickback from any company or product I have written about. I honestly hope that some day I am investigated for something I said or written on this blog because it is going to be funny to sit back and laugh when they find not so much as one untimely stock purchase, kick back, or payment for anything.
BTW the promo is going great 😉
My 2 cents……
This site has always written about companies in the space, and I have spoken many times about Slacker. I am a fan of that service just as much as I am a fan of sirius XM.
There are aspects of Slacker that are better than satellite, and aspects of satellite that are better than slacker. I use both, and don’t need to hide that fact.
SCRF…
I hope friggin wins it, I want to see that video of it in the blender!!!
vaporgold
Vapor.
No doubt we gotta get Friggen to post this thing on utube.
Vapor and all. Earnings out Thursday??? Should be interesting to say the least.
Malone’s stocks have traditionally been under performers ie boring. Cramer has bashed him as well. I consider him a passive investor.
Obviously Q4 will suck. But the question is how close to break even are we, and did Mel get any concessions from the big bucks programming. We really need break even before the reverse stock split.
We knew from the stockholders meeting and proxy that there would be huge dilution. No one should be surprised. Be happy there was no chapter 11, (but the day is still early).
Good news on the institutional holders list. FMR has finally left the building. They have been known to be dumpers killing stocks in their wake. Whereas Vanguard have been known for sticking with a good story. With the churn from the Chapter 11 threat, we will know in 3 months who are friends are.
How many on here think that Mel will try to find a better loan package before April? What are his chances??
vaporgold
I don’t know what his chances are, but he HAS to try to find a better deal. I don’t think most investors realize exactly how horrendous this deal with Liberty really. We’re giving up 40% of the company for a 15%LOAN!
Mel will figure something out. He structured it for an out, but this is insurance if markets don’t allow for anything better. At least we have options.
I don’t see how he could find a worse package! Giving away 40% of the company to eliminate zero-point-zero debt AND having to repay at an exorbitant interest rate? You’ve got to be f%&king kidding me!
Iam looking forward to the Q4 report. How much cash on hand does Sirius XM have?..Did they burn it all? Can it play a part in a new loan hopefully in April?
I agree with you guys this loan was bad news.
vaporgold
My take. Zero chance. The Melone thing landed in his lap. Only the Ergen factor even brought Malone to him. Ergen had his neck on the ground with his foot on it. In my not humble opinion.
I agree with you guys. If mel can find something better before april without giving into this 15 percent and 40 percent stake siriusXm will RISEUP. Its a big IF though and in this economy im just happy they havent had to file chapter 11.
I really think the 4q numbers will be in line. I dont think they will disappoint but they wont be great either. When they do report though we can find out how much cash on hand they have and if all the projections are still holding fairly close.
If they are siriusXm stock should rise some then.
Could Mel’s option to find a better deal by April also still be a loophole by which he can still file BK and give Malone an OUT, or would that have to be written in? I’m just trying to consider every aspect, but it clearly seems like only a “bridge” past Feb debt obligations till Mel can negotiate something better.
My main question is- is BK still on the table before the May debt is due. Especially in light of the fact that it doesn’t look like the DOW/economy is going to get much better by then.
I would doubt it. I can’t see any judge entertaining a chapter 11 petition when they have a reasonable option to avoid it.
So the greater than 100 million trades on this stocks are day traders? What is with all this drama? What an absolute waste of time any money-the only people making money on this one are on Wall Street taking your endless trades on this company.
Anyway,Why trade any stock( no less a penny stock )but 2-3 times a wk.
Hell, the mail only needs to be delivered 3 times a wk- If you need more then send it express.
Me thinks that there is too much redundancy/ and the people that really need to loose their jobs and become part timers are theanaylists ,traders and overblown moosed up/ made up TV business personalitites.Whats with those aholes on Fast Money? Amen.
The superior deal provision in the Liberty deal is pretty close to boiler plate given Delaware law… easy to pass off as the going rate; but is it a real out? Yes. Maybe a better deal is hanging in the shadows.
The analysts are afraid to stick their neck out, and the bashers are out in full force.
Just look at these headlines from articles about Sirius the last few days. Here are just a few. It’s Unbelievable.
1) “DO This Before You Lose Everything” – Motley Fool
2) “Run From Sirius” – The Street.com
3) “The 10 Worst Recession Stocks” – Motley Fool
4) “For Sirius, Liberty isn’t Freedom” – Wall Street Journal
5) “Sirius Saved, but Static Continues” – The Street.com
6) “Against the grain: SELL SIRIUS” – The Street.com
I could go on, but whats the point? It’s friggin obvious that the media has it in for Sirius. The bashers pump the media with negative spin stories to stoke the flames of fear. It’s been the same game forever with this stock, thru the best of times and the worst of times. It doesn’t matter. They have it in for this stock and company, and will stop at nothing to keep it down.
You can’t blame this on the economy. The powers that be have had it in for Sirius WAY BEFORE the market started tanking.
The fact that Sirius managed to refinance debt in this tight credit market has gone TOTALLY unnoticed by the media. No positive spin.
Sirius could have a KICK ASS 4Q and surprise EVERYONE….and I bet you they STILL won’t get any love. They could have great earnings reports for the next 3 quarters….and they’d get nothing but bashing and negative spin. Just watch.
I’m going to keep averaging down the lower it goes until I reach a point where breakeven is only a small pop away. Then I’m out. Nothing against the stock or company….it’s just that I can’t stand the manipulation. I am tired of having a bullseye on my back with this equity. There are so many other stocks out there that don’t get this kind of treatment, and I can’t wait to shift my funds to them and get out of the basher’s crosshairs.
I suggest ‘Friggin’ that you do just that, avg. down to the pop, but take a page from Cramer and have enough averaged down that when you pull out, what you LEAVE in is the ‘houses money’ and play that out!!
Especially given all the pain we’ve been through…………….we deserve some dough if not, Love!!
My concern is, as you astutely pointed out, that despite a Kick Ass Q4, we will likely get riled……….what happens if Q4 is more of a kick in the ass……….?? Will we really get sacked……….?
Hi Friggin..
The press has always been negative because they have a point. The company does not make money,has a ton of shares out, and a ton of debt. We are such an easy target for them to blast.
Having said that, they also know that they can get hits to their web page anytime they say anything about SiriusXM.
I don’t go to the sites, especially the street, and motley. They are nothing but Slam News Headlines as you pointed out.
So we have a lot of problems, ignore us, that is fine with me. Hopefully the mangement is working through them and not working on taking the company private in the future.
I have average down also about as far as I can,any more would probably result in me living alone.
Good Luck to my fellow shareholders
vaporgold
I gotta just come out and say it. Mel believed the press that if he got this merger done he was all that. Looks to me like he forgot the entire story of “after the merger”, and since has had his ass handed to him daily.
No victimes. Ergen would never had the chance had Mel put the company in a different position. And let’s not forget,that GS sold that debt to Ergen.
Mel, to me is like a has been who still gets paid for his autograph at old fogie sports memorabilia shows. Like the song says. Used to be’s just lay on the floor till we sweep them away.
Without Tyler posting during the last hour of possible BK I would have sold out at .05. And that’s the truth.
What a clusterfuck. We post like a bunch of investor victims. Pathetic. And I’m first to point the finger at myself.
I need to attend an AA mtg for Sirius/XM investors. Hook me up someone.
IMHO, you should read this, knowing what we now see, and try to tell me I’m wrong. Thanks.http://messages.finance.yahoo......=1#4079160
LOL……………2 !!
The shit is thick !!
Go Figure……. 😉
I don’t post all that often, but have been with this company seriously for the past 8 months or so. What I have learned is this stock sucks, I truly believe the company has a good product, but as far the stock, if you can short go ahead if you can go long go for it, if you can do both, more power to you, I have come to the conclusion that mm and specialist and or course corporate money wins every time. I truly believe that they are out to screw the retail investor, that said I have made money on this Dog, almost everyday this month so far, I find pre-Market and after market hours seem to be working. I lost in excess of 28,000 on this bitch of stock,