SIRI Continues Upward Momentum
Sirius XM’s price recent spike in Sirius XM has many investors quite happy early this week. The move seems to coincide with the presentation Mel Karmazin gave at the Bank of America conference. Karmazin did a fantastic job of outlining the current positives Sirius XM is experiencing, but perhaps the key was his outlook going forward.
For a long time SIRI stock has been about potential. With a good Q2 in the books, stable auto sales, and the fact that there is little debt due this year, investors are finally beginning to look at Sirius XM in a new light. Today’s spike was nice, and the volume above average. These are positive signs. The question is how high can the equity run?
Personally I would like to see more volume, but that is my style. I have much greater confidence when there is heavy volume associated with a move up. I also like to see that heavy volume have a follow through. The moving averages that I like to follow are all very bullish. This would seem to indicate a further move upward in the coming days. My caution still rests with the volume. If I had to guess I would say that another leg up is in the cards, and a retracement afterward down to $1.10 is likely. That patter on good volume would be a healthy event for the stock.
The wild cards are some of the contracts Sirius XM is currently negotiating. Always be aware of potential news. For investors this means being ready to p ull the trigger. This stock has anticipation now. If that anticipation continues it is great. If news dampers the anticipation be ready.
Position – Long Sirius XM Radio
NFL deal should be announced soon–Im assuming the trend for lower costs with more tie ins will continue
Spencer, Good writing as always. Ignore the knuckleheads on previous posts. Can you comment on the possibilty of SIRI being including in the QQQ funds later this year? I have not heard abyone discuss this and it is right around the corner. Lastly what do you predict to be the sub numbers for q3
I’m a little bit reluctant to bet on the $1.10 retracement this time around . . $1.18 is where I thought we belonged on the Russell Rebalancing in the first place, so, to me, this is all pure catch-up. $1.25 will be the test, then perhaps some end-of-Q selling to lock profits.
I think this move also shows the difficulty in trying to correlate put/call contracts to the timing of swings in the common . . just too many variables at play, imo.
Just one other thought . . . as to the volume, I think it is worthwhile examining it within the context of the trend-line.
While the daily volume by itself, as an isolated variable, may not reflect the conviction that you would like to see, the longer-term trend-line does show momentum conviction, imo. dyodd
Spoke to soon.
who cares where this stock goes in the near future all I know that for all the longs like myself this stock will be over $5 by 2013.
At the media conference last week, Mel talked about his reason for not doing a reverse split. Commented that there is no difference between ten 1 dollar bills and a ten dollar bill. I get his thinking, BUT wouldn’t reducing the float help alot at this point? This stock has made great gains over the last 18 months and future is very bright, but I still would argue with Mel on the reverse split.
Spencer,
All I can say is if you are bullish and not writing about pandora then it is time sell siri.
LOL !
Thanks for the advise Spencer but I am keeping my SIRI stock long and wont sell them. People will regret not buying SIRI when it was at $1 for so many months too late now!
Looks like you were right again, it appears to be headed for $1.10.
by the time this article came out, the headline did not match the direction.
$1.12 on 32M Shares
Welp, looks like Savery put the whamma-jamma on us . . . but on exceedingly WEAK VOLUME Tyler . . . exceedingly weak, negligible in fact, miniscule (just bustin); good call Spence.
The bad part is that Sirius usually has 3 days of selling and the 3rd is usually the scariest with the most volume before it turns around. I have a feeling 1.05 will be the bottom if something does not spark this tomorrow morning. We have economic numbers tomorrow that will set the trend.
If it hits $1.1 it will instantly spike up 2-3 %
too many day traders making small profits. just watch the spike marks. long term prediction is 1.41 by years end and 2.80 by next summer and 5.00 by the end of 2011……any comments!
I am moving this down the list, posted earlier in the week and it was awaiting approval? Would appreciate some feedback on topic.
At the media conference last week, Mel talked about his reason for not doing a reverse split. Commented that there is no difference between ten 1 dollar bills and a ten dollar bill. I get his thinking, BUT wouldn’t reducing the float help alot at this point? This stock has made great gains over the last 18 months and future is very bright, but I still would argue with Mel on the reverse split.
By year’s end siri should cross at least $1.50 mark and may get to as high as $1.80. The most critical stock mover is the number of new subs in Q3. If they attain in Q3 similar numbers to Q2, this is going to be revolutionary because 2010 growth rate will end up being close to 2M new subs that nobody believed was possible in principle in this economy. Such result could be a clear indicator of a possibility of over 3M new annual subs in good or great economy. All the market wants is to see significant siri GROWTH. If siri delivers such GROWTH in 2010, I agree the stock could be close to $5 at the end of 2011, early 2012. Another huge contributor is much smaller capex diminishing to under 10M annually after 2011. Cash generation to payoff debt is the third equally if not more important contributor that will allow either to retire debt or to refinance a significant chunk at much more attractive rates resulting in smaller interest payments. I am sure any new borrowing will also provide for NO caveots for shares buy back. We are truly in for great times.
The one thing that would make SIRI spike like it did in 2009 is paying down their debt. As soon as the Economy is stable and SIRI starts making millions of dollars in profit I think the CEO will start paying down the debt slowly but surely.
SIRI should have about $500 million in cash by the end of the year and possibly close to $800-$1 billion by the end of next year. At that point, i’m guessing they will knock out about 20% of their debt, or about $600 million in the next 12 months…then hopefully another 30% or $900 mill by the end of 2012…
That would leave SIRI with about 1.5 billion in debt in about 2-3 years. By that time SIRI will be bringing in close to $4 billion in revenue/year. Imagine 22 million subs paying about $15/month…an increase of about 1 million subs a year and a $2-3 price increase per sub coming next year late…good times!
I don’t think it’s out of the realm of possibility for SIRI to be almost completely out of debt by 2017 or so…by then the stock would almost definitely, with no debt and 30 million subs, be worth $8-$12/share without a split…
Long SIRI…
Still here and Long as well, I started waaaaayyyyyy long ago with a PPS avg=$7 !!
I have long since dollar cost averaged DOWN to $0.95 well in excess of 100K shrs………………this will continue to edge up, albeit painfully slow as the legion of traders continue to reap profits off of the 3-5 cent swings in this equity.
Consider the 2.0 platform next year, spurred on by Sterns & Karmazins thoughts on ‘revolutionizing’ audio streams, selection capability, and content-entertainment as a whole.
This stock will be worth its weight in Gold folks !!!
As to your concern about volume, go back to the breakout in January/February. Volume remained low, even lower than the last week, until Sirius hit a new high. Its simply not true that you need volume to go up.
Look at that move up in January. Very much like this time it moved up to 70 cents, backed off a couple of days, then proceeded up to break that prior high of 78 cents — that was the first day in the rally that volume exceeded 100 million.
As Sirius XM gains more and more in the media market and starts making a profit it becomes too juicy a fruit to stay a stand alone company. There’s going to be a move towards a buyout with a bidding war ensuing. It’s as clear as the sun coming up tomorrow. A lot of money is going to be made. Who would have thought just a few years ago that the late arriver Sirius would buy out the first satellite broadcaster, XM? Mel’s MO is to build up a company and then sell it for huge profit. I won’t even guess at the final price, but it won’t be cheap. That will be our deliverance!
Just a thought regarding a buyout…if Liberty or someone else decided they wanted SIRI, how could SIRI be worth more than $3 or so right now. In 5-10 years with most debt paid off and 30 million subs instead of 20, i could see a larger price offered. But with 3 billion shares, you’re looking at a price tag of $10 billion or so at $3/share…and that doesn’t include the $3 billion in debt? I just don’t see anyone paying $10-15 billion for SIRI in the next 18 months…
Any thoughts? Also, how do the NOL’s work? If a company buys SIRI, can they take advantage of the NOL’s? For example, pay $10 billion for SIRI but get $7 billion in tax breaks or whatever it is that SIRI has?
Just some thoughts…any comment appreciated…
Spencer,
Can you please write an article on how limited data plans will effect SIRI or pandora? Will it be good for siri in future because pandora will be limited to consumers. Please read the second last paragraph for below article
Is it a SLOW DEATH not to be NEEDED…?
Are you in a room full of people and yet feel that you are on the outside looking in?
Have you deliberately or even inadvertently built a wall around you to the exclusion
of everyone, thus creating a self induced feeling of loneliness and isolation…
wanting but being unable to let anyone in?…….LOL
Sorry folks. We know you like streaming Pandora all day on your smartphone, but the wireless networks just can’t handle that level of traffic. Despite what they may say now, you’ve got to expect that eventually all carriers will end up with tiered data plans…… A real competition indeed.