Redemption Is At Hand
With everything that happens in the world of Sirius XM, it’s easy to forget the little nuances that have occurred in recent weeks. It seems like years ago, but it was just 1 month ago when Mel Karmazin was speaking at a Merrill Lynch conference.
It was that very conference which sent Sirius XM stock plummetting to its current lows. I wrote about it immediately in an article titled “Why Is Sirius XM Going Down?” It was in that conference when Mel, speaking in general terms, was taken literally for each and every word he spoke. The end result was a perception that Sirius XM was lowering guidance. Every firm on Wall Street adjusted their models downward to reflect the numbers the company had provided.
The faithful readers of SiriusBuzz and listeners of SiriusBuzzRadio will know that I had stated my belief that these numbers were inaccurate but that the street took them as law. One example of low-balling was a conservative estimate of an expected 19.5 million subscribers by year end.
According to Satwaves.com however, today Mel indicated that the company currently HAS 19.5 million subscribers! This would make over 20 million entirely plausible by year end, and would mean that every analyst on the street would need to revise their forecast models upwards.
I find it ironic that the street took Mel’s last statement as the Word of God, yet this one seems to have been completely ignored. Q3 results could prove very interesting. Stay tuned!
Position: Long SIRI
were in the eye of a finanical storm right now.
we would all love to wake up tomarow with good news and a big pop but even good news during this current mess of a market would’ent be very effictive.
mel & crew are aware of this and awaighting the right time , let the storm settel a bit , feb. is 3+ months from now.
meanwhile it leaves us with great oppertunity!
I just spoke with Shirly from IR. It seems Mel’s comments about the 19.5 M subscribers may have been taken out of context. She says the guidance from the September Merril CC still stands… 19.5M by EOY. But, she informed me that we’d get an update in early November during the Q3 CC.
That said, I’m not sure how much info these folks from IR really have… guess we’ll have to wait.
I’ve noticed, not a hard observation, that the market is pricing the worst case scenarios into most equities. And, less than refinancing, profitability or both, Sirius XM Radio will continue to trade much lower than we would place fair value.
This stock is no longer a play on subscribers, as it hasn’t been for a long time. And I’m sorry that Tyler Savory, in his all-knowing-ness, is suggesting that redemption draws near.
The key to Sirius will be a combination of various metrics — to include subscriber acquisition costs (which I expect to fall for Sirius XM in the 3rd), negative EPS mitigation (reducing the costs!), and financing. Churn will be a postitive or negative factor as well. Sirius can acquire many, but if many leave, the company contracts horribly if growth and SAC should change not to their favor. Don’t be fooled by pumper posts, people. Look at the hard fundamentals. SUBS DO NOT MATTER, IMHO!!!
WHAT IS IMPORTANT: The Best of Sirius package will likely make it easier to assess the advertising value to the howard stern show! Think about it a bit…
All I can say is that another bad day like this and Sirius is at .35 cents again, so going all in here could be an ouch again.
It’s hard to be “patient” when the value of your stock has gone from a healthy chunk of savings to chump change I keep in my freakin’ drawer.
I’m totally impatient right now as I want to hear news from a company in which I own 15,000 shares. And not the same b.s. Mel spews each month that gets us nowhere, if not into a bigger hole.
Really, don’t tell me to be “patient,” just tell me to continue to be “stuck” in this shithouse stock.
Brandon, I am not sure if it was a typo or if it was a misunderstanding (that Mel really ment 19.5 million by years end). No offence to Dominic but he has before taken things to literal and not first confirmed the article before starting a rumor off a missprint.
We’re lucky if the # is 19 million by the end of the 3rd quarter.
We’ll find out soon enough with the 3rd Q CC probably in 3 weeks.
SXMInvestor, I think you are correct. I believe if they get 300,000 this quarter they will be lucky. I also think if they have 19 million by end of 3rd Q then Mel may have underestimated the final EOY sub number.
I’m want to believe, but 3Q results, as good as they could be, will probably mean little more than a small quick pop in the current environment. I’m waiting for Q4 to get more shares unless they go below 25 cents…Then I’ll have a little dilemma.
Lots of good comments here, Cost side metrics are EXACTLY where it’s at for the next three months… Hope that sub numbers are a pleasant suprise, but realize that cost cutting effectively will be the bridge to sucessful refinancing in 2009. I will watching for cost cutting info and base further buying more on cost side than ANYTHING else said at this point. Companies that are solvent do not go BK. If Mel wants to show these pricks, (and he does), it gets done by slashing for immediate future. Address the present, then you get a chance to participate in the future…
Hold The Phone!
First, What did Howard say?
Second. Delisting notices come after 180 days. NOT 30 days. Next April is when it would come.
Imagine the cuts taking place to make up for 425 million or so.
Take for example the 80 employees they just let go from XM. Let’s just say they cost the company 50k each, so this will only be 4 million cut or less than 1% of the # Mel is trying to get to.
Basically the yearly cost of Mad Dog. 80 for 1