SIRI Up In Stock Price But Signals Are Mixed
Over the past two weeks Sirius XM has enjoyed a pps move of over 10% to the upside. Investors who are long the stock have enjoyed the move, but from a technical standpoint there are still caution flags in the road. The easiest ones to spot are the low volume and heavy activity on the put side of the options market. These road blocks do not instill confidence in the upward momentum, but somehow the stock has seemed to hold the line as this weeks trading came to a close.
Perhaps some of that confidence was born from Mel Karmazin’s speech at the Bank of America Conference. The CEO of Sirius XM spoke with confidence, and painted a bright outlook for the future. The stock responde3d well and has been able to hold the ground, but the question is for how long. Sirius XM is now at the top end of a trading range that has been between $0.90 and $1.10.
A couple of key events over the coming weeks should help the street see if the latest move up is real. We have the contract status of Opie & Anthony, September auto sales, and of course the status of the Howard Stern contract:
Opie & Anthony
The current contract of O & A only has a couple of weeks left. The shock jock duo, along with Jim Norton, have been a staple on the XM side of the satellite radio service and have a passionate fan base. They called Sirius XM’s offer “laughable”, and have indicated that their show will continue whether on satellite or another medium. In my mind Sirius XM is walking dangerous ground here if they let O&A go. If Opie & Anthony take there show to terrestrial or even a service like Pandora, it is a slap to Satellite radio, and a notch up for whatever service they go to. There has been rumor that Pandora may want to go public this fall. If they raise enough money, bringing in a talent like O&A, which has a core group of fans, could be enough to put the Internet Radio service company on the map with live content. Whatever happens with O & A the news will spread quickly.
September Auto Sales
The key that we will all be looking for is sales that come in near or above the magic 1 million number. If the auto sector can sell 1 million cars in September, there will be a virtual certainty that Sirius XM can report good metrics across the board. With July and August setting the quarterly bar at 1 million, investors can clearly see a third quarter that will rival the second. In Q2 the company posted strong results. Mel has stated several times that with auto sales at around 12 million per year that the business model looks great. A second consecutive quarter of great results will demonstrate more definitively that Mel is speaking about real performance, not just blowing smoke.
Howard Stern
Some speculate that a deal in principle is already in place. I highly doubt this. Stern is not the type to give up negotiating power and to hold off for “the right moment” for the company. He will utilize every advantage he can, and a deal in principle does not benefit Stern. The company has said they anticipate an announcement on the Stern Show sometime prior to their Q3 call (first week of November). The subject will come up when the O&A deal is announced, and depending on what happens with that contract, the speculation could reach a fever pitch. If Stern leaves, it will be a hit to Sirius XM at least in perception. Should Stern move to an Internet platform, it would mean trouble and the emergence of a competitor that until now many have refused to accept as a rival.
the simple facts are that services like Pandora will continue to grow. people have been saying forever that they would die. They have been saying that the royalty rates are too high. They have been ignoring the viral marketing and acceptance these types of services have. If Internet radio can land a couple of high profile live shows, they can generate revenue and HELP their own business model.
Watch for Sirius XM to be a mixed bag until these issues are resolved and they report their Q3 numbers. The light volume we currently see would give me pause on saying that things are bullish right now. The potential is there, but there are reasons some are still skeptical.
You should definitely integrate Pandora into your blogs name somehow. You really love them.
Talk about speculation. You keep speculating that Pandora will go public later in the year and snatch Howard Stern & O & A ?
You and Digital Radio Central are a good fit combining forces – all seriousness !
You are definitely the devils advocate when it comes to Sirius. I think you might be thinking too short-term. This stock is cheap here even though it could take a little dip short-term with lack of resolution to contracts of Howard, O & A, NFL.
I do not “love” pandora. I am simply a realist. I think sirius XM will do fine, but there are short term things that are important. Anyone who ignores Pandora is being a fool.
We have all heard you.
Mel does not see ANY businesses out there that he has any interest in acquiring and I believe him.
Pandora will not be able to compete as a $ making business unless they start charging everyone and then that will cause peopel to look a the content of Sirius and it is no comparison.
Pandora will die a slow death when 2.0 arrives on the scene.
First, allow me to apologize in advance for any consumers who may have stumbled upon this article; the following post by me will be “off-topic” and of no interest to you at all.
quoting sxminvestor . .
sxminvestor says:
September 18, 2010 at 5:25 pm
“You (Spencer) are definitely the devils advocate . .”
“This stock is cheap here . .”
Hey SXM, you are correct on both counts:
1.) I just scrolled-up and looked at Spence’s picture again; if you imagine a pair of horns and a pitchfork over his shoulder there is a certain satanic resemblance . . . could Spencer Osborne be Rosemary’s baby . . or just a distant relative of Ozzy Osbourne?
2.) Dr. John Malone, Ph.D. (Johns Hopkins), cable TV pioneer and one of the world’s richest men (Forbes) agrees with you. In fact, here is what Dr. Malone said recently at the BOA presentation:
“We still think Sirius is cheap. We probably would like to own more of it. So I think we’re still in the create value rather than distribute value mode with respect to that particular asset.”
source: https://siriusbuzz.com/forum/showthread.php?p=64837#post64837
Of course, as Spencer would caution, you cannot rule out the possibility that Dr. Malone is just a “Rookie” blowing smoke or, like Mel, is just “sugar coating things” because “it is what every company does.”
so be sure to dyodd . .
I never said Malone is a rookie. He is a shrewd business man. He has SIRI by the short hairs and can make life difficult if he wants to.
Mel is doing what he is supposed to do. The biggest mistake an investor can make is to believe every word a CEO says. I like Mel, but know enough about him to know a sales pitch and some smoke and mirrors are part of his arsenal. Same with Malone
Spencer, the stock price of siri has been very difficult to predict over the last 4 months. The russell addition didnt do alot when many said siri was going to 1.42 by the end of june. The last great CC beginning of Aug didnt crank up the price as much as it should have. I think if you look FORWARD-as the markets are forward looking, sirius is a CASH COW and will continue to have improving profits each quarter. The Reverse Split issue is OFF the table, and new money will pour in to the common as the price rises further and further away from that 1.00 mark. Stern and Mel will come to some sort of agreement. Sirius wont pay him as much as before, but will still pay him a “fair and equitable” amount, alomg with some very nice stock options. Being short on siri right now is a very dangerous game indeed, as siri continues to climb to a soon new 52 week high imo.
I have long thought that Stern would ultimately stay, including just recently. However in recent weeks, I have seen enough signals to give me some doubt. In fact, I sold my shares during this run-up and will probably buy them back after the news. Right now I think Sirius is resting on their laurels, which Stern has noticed. Everything has changed with their recent success, he has observed, and he is not loved any longer. He has always gotten a charge by sticking it to the man, and his ego is so massive that he loves attention, which he hasn’t really received at Sirius. If he were on the internet, iPhone, Android, etc. he could deserve the title of “king of of all media.” I’m still not certain that he’ll move, because he does seem fond of Sirius and likes the situation, but I think it is closer to 50/50 now. The big question is whether they will kiss his behind. If not, then watch out.
As for Spencer’s love of Pandora, get real. I have read this blog for years and he has always talked about Internet radio. If I remember, he preferred the Slacker model over Pandora until relatively recently. The fact is, if you’re involved with this equity, you need to consider the competition of new media.
As a consumer I still prefer Slacker over Pandora. I very rarely listen to Pandora. I have friends that uyse it all the time though.
I am not a pandora lover….I just keep an eye on it and it is the biggest out there, so it will get mentioned a lot.
As Mel himself has so often said . . “It would be helpful if we dealt with the facts.”
So here are the facts:
Date Open High Low Close Volume
Sep 17, 2010 1.11 1.13 1.10 1.12 63,739,702
Sep 16, 2010 1.10 1.14 1.09 1.10 55,139,825
Sep 15, 2010 1.05 1.13 1.05 1.10 101,088,154
Sep 14, 2010 1.04 1.06 1.04 1.05 40,716,505
Sep 13, 2010 1.05 1.06 1.04 1.06 45,244,564
Sep 10, 2010 1.04 1.05 1.03 1.04 48,742,174
Sep 9, 2010 1.04 1.05 1.04 1.05 48,759,195
Sep 8, 2010 1.02 1.05 1.01 1.05 75,230,009
Sep 7, 2010 0.99 1.02 0.99 1.01 59,217,408
Sep 6, 2010 1.01 1.01 1.01 1.01 0
Sep 3, 2010 1.00 1.01 0.99 1.01 83,070,841
Sep 2, 2010 0.99 1.00 0.98 0.99 113,319,983
Sep 1, 2010 0.97 0.99 0.96 0.99 142,369,023
Here’s another fact:
David Bank’s big SAC has cost RBC Capital Markets clients a 13.13% return since 9/1.
Now here’s some speculation (just like yours):
Put activity in the options market “could” also be interpreted as hedging a long position in the common.
Here’s another fact . . I got this one from Mel; he just said this on 9/15 at the BOA presentation, quote:
Pandora and Slacker are “advertising companies.”
so on low and anemic volume the heavy put to call ratio is hedging…..okie dokie.
average volume is 76 million shares. 66% of those trading days came in below the average volume….FACT
I would ask you to examine 2 specific dates: September 8 and September 15:
Both reflect the largest single-day moves for the sampling period under review and both were made on good volume. Combined, those 2 days alone account for 61.5% of the total move over the sampling period while averaging 88M shares.
Sept 8 opened at $1.02 and closed at $1.05 for a $0.03 gain (+2.9%) on 75M shares;
Sept 15 opened at $1.05 and closed at $1.10 for a $0.05 gain (+4.76%) on 101M shares.
On the lighter volume days, SP was flat to up $0.01 as might be expected.
The daily volume should also be considered within the broader context of the sampling period trend.
Also, as you know, the timing of put activity may or may not correlate/coincide directly with long positions in the equity and we could go on and on debating contarian signals . . but better discussion for the forums perhaps.
Different ways of interpreting the same data set is what makes it a horse race!
Here’s another fact:
Arbitron study reveals 40 MILLION listeners.
Here’s another fact:
Choices in the car:
Sirius XM 71%
AM/FM 17%
CD’s 7%
Mobile Devices 5%
source: https://siriusbuzz.com/forum/showthread.php?t=4411&page=9
the study excludes music channels, and is a study about satellite radio subscribers. Thus the 80% of the country without satellite is likely:
80% terrestrial radio
10% CD’s
10% mobile devices.
Wake uyp man…..stats can be made to say ANYTHING
I would think it is fairly apparent to anyone reading it that the express purpose of the survey is to measure consumer behavior when ALL OPTIONS are available to listeners while in their cars . . .
While I must agree with you that the stats you cite have been made up, are you alleging that Sirius XM executives have conspired with Arbitron to produce an intentionally biased and manipulated survey with which to defraud consumers and shareholders?
Here’s another fact:
2010 SUBSCRIPTION RADIO REVENUE
. . . . TOTAL $3.1 BILLION
. . . . . . . SATELLITE RADIO: $2.8 BILLION
. . . . . . . INTERNET RADIO: $0.3 BILLION
source: https://siriusbuzz.com/forum/showthread.php?t=4411&page=9
watch this change substantially in the next two years….and why would a consumer care about this?
Here’s another fact:
2009 REVENUE MODEL:
Sirius XM: $136/Subscriber
Sirius XM: $72/Listener
Terrestrial Radio: $10-$20/User
Internet Radio: $1.25/User
source: https://siriusbuzz.com/forum/showthread.php?t=4411&page=9
and to a consumer this matters how?
Spencer, you really need to listen again to Mel’s presentation at the BOA conference or at least take another look at the slides that Sirius Roadkill posted in the forums at link shown above. Folks need to listen to Mel he always delivers…just sayin you are really stretching here to find some negatives…
Boomer…..
I have heard the conference, and yes, there are positives. I also think that there are things Mel is sugar coating because3 he has to. Nothing wrong with it, it is what every company does.
Here’s another fact:
LARGEST U.S. SUBSCRIPTION MEDIA BUSINESSES . . .
COMCAST: 23.2 million subs
SIRIUS XM: 19.5 million subs (and still growing)
DIRECT TV: 18.8 million subs
NETFLIX: 15 million subs
DISH NETWORK: 14.3 million subs (a pox on Ergen’s house btw)
TIME WARNER CABLE: 12.7 million subs
CHARTER: 4.7 million subs
CABLEVISION: 3.1 million subs (please Dolan sell the Knicks)
TIVO: 2.4 million subs
source: https://siriusbuzz.com/forum/showthread.php?t=4411&page=10
You guys need to get used to the fact that Pandora is here to stay.
I could give 2 shi%s whether or not they make money…They are here.
I could give two shi*ts whether or not they have revenue….they are here
I could give two shi$s whether or not they are an they are an advertising model…They have several aspects of their service that are superior.
I could give two s%its whether they they are “good or not…..MILLIONS are exposed to their service because it is in the marketplace.
I could give two shi&s about whether or not they are “just Internet Radio….Internet radio is growing every day.
The fact is that unless Sirius XM keeps itself unique with content they will suffer. Improvements in the mobile arena are being made every day. Tell me a car manufacturer that wants to ignore the smart phone platform.
The way Sirius XM stays unique is to keep the content they have. If they can not do that then there will be trouble.
The comparison of business models only matters if you are deciding where to invest. Consumers could give two sh*ts about business models. They want what they want at the best price possible. Too many people that follow satellite get two compacent.
2 friggin months to update the Android app. Are you kidding me? Unacceptable. If that is the best Sirius XM can do then they should simply walk away from the android market. can you believe that they were promoting the Android app on Sirius XM channels when it wouldn’t even work! What idiocy is that?
I love satellite radio, but I refuse to be an apologist for poor execution….and refuse to bury my head in the sand about the smart phone arena.
The real issue is how do you get 18-35 year old men and ALL women more interested in Sat radio. No one who makes more tham 6 bucks a hour listens to Internet Radio in the car on a smart phone. Siri-Xm is a great product and its the Sports and News along with the music. It needs to appeal to more women and that’s a tough sell. In the end its a great niche product with real pricing power. It just won’t grow as much as I would like as an investor. It should still hit 25 million subs at $25 bucks a month plus advertising. 7-8 billion in revenue.
Spencer,
Let us not forget that siri is a business and a public company at ther same time. O&A, Stern et al. are an arrogant bunch of hugely overpaid blokes. They took advantage of the cut throat competition between siri and xm and have been bilking these companies for years. Let us remind them that this is NO LONGER THE CASE. Siri should never get them at ANY PRICE. These times are GONE. Siri should get them at a Reasonable Price rather than “screw you siri/xm and oyur share holders times”. By the way, why should they be singled out in such tough economic times. They should carry the burden just like anybody else. Siri still has a reponsibility before its shareholders, and Karmazin knows that. He he has a thorough understanding of a business and comprehensive knowledge how to run a business unlike many so called proponents of doing things at any cost.
Just name any other company that could shell out tens of millions for a talent. Pandora! I would be delighted if they could hire these talents because they will find themselves very quickly where siri and xm used to be.
Let us get real. I hope these “indispensable talents” would sober up after many years of bacchanalia at share holders’ expense and do what normal business people do. Negotiate in god conscience and reason. My message to them is “Get real!!!
Here’s another fact:
Quoting Mel from the BOA presentation about the prospects of re-signing Howard Stern:
“There hasn’t been one contract that we haven’t renewed.”
“We have been able to extend and renew with every one of our partners.”
source:
you can look that one up . . it’s true!
Elen Degeneres…..she is no longer there.
Maxim Radio….gone
Vinnie Politan….gone
Fox…was gone for 4 months. Not renewed…gone…A deal was done later.
Mel is a salesman…..anything that is gone is because “we did not want it anymore”
There has been plenty that has disappeared over the years.
Here’s another fact:
Quoting Mel at the BOA presentation on 9/15 . . regarding Howard Stern:
“He has been a fabulous partner.”
“I wanna sign Howard.”
“We’ve run the #’s . . we have a lot of information on that.”
Now, here’s some speculation like yours:
Yes, it is true the NFL content is not exclusive to Sirius XM
but . . that is a bogus argument as far as the business model is concerned
The NFL is an anchor-store in the Sirius XM shopping mall . . . a significant driver of foot-traffic. It is the additional programming that is built around that NFL anchor-store that enables the true exclusive content, like John Madden, Joe Namath, the draftnick shows and numerous others, to exist and draw subscribers.
The NFL on Sirius XM is a must. They have been a great partner and Mel says the renewal is already done (another contract renewed and probably at more favorable terms to shareholders . . . like GM, NBA etc)
Great work Mel!
you state:
“If Internet radio can land a couple of high profile live shows, they can generate revenue and HELP their own business model.”
more spculation by me . . chicken & egg argument. You need content to get revenue. You need revenue to pay the content.
Good luck getting Howard Stern to take stock-based compensation in Pandora . . .
Hpoward does not need stock from Pandora.
The only worry I have about Pandora landing content is this….,
The company goes public, raises a ton of cash and can then use that cash to pay out for content…..HMMMM
or
Pandora announces a Stern-like content deal, then announces their IPO. The fact that they have this wonderful piece of content allows them to raise more at an IPO.
Think deeper. If you were pandora and wanting to do the next step how would you handle it?
Spencer,
Get Real! Pandora gets public and raises a ton of what… cash? Are you kidding me? How much cash can they raise in this economic environment? $60-70MM at best. What can they buy for that? One year of Howard Stern, if at all. So, what is next? I agree with you that siri should not be sitting on its laurels and waiting for miracles; that they should get more technological. I get your point. Still,the main focus of their business model at the moment is THE AUTOMOBILE. There is no room for pandoras there. This is why pandoras are auxiliary for siri. Once siri brand is recognized as much as coke or pepsi, it will be so much easier to get into every other device folks listen to.
VI…..
If a company goes public with 100 million shares they can raise a ton of cash.
Internet radio is being forced into a subscription based model. If they get enough revenue they pay royalties of 25%. Bringing on a talent like Stern or O&A would carry a fee to the consumer. They wont have to pay all of the cash up front. They simply give a portion of the revenue from those that want that content.
look at what Ford is doing:
http://www.ford.com/about-ford.....2011-32471
You state:
“Some speculate that a deal in principle is already in place. I highly doubt this. Stern is not the type to give up negotiating power and to hold off for “the right moment” for the company. He will utilize every advantage he can, and a deal in principle does not benefit Stern.”
Here’s what Howard Stern said recently:
Howard Staying Silent About Contract Negotiations? 09/13/10. 8:15am
Howard took a call from a guy who asked if Howard was dropping a bomb saying that Robin and Nancy Sinatra sent him wine and if that was about his signing with SIRIUS. Howard said he would rather not talk about what’s going on with that right now. He said that the wine came out of the blue and had nothing to do with his contract. He’s not talking about what’s going on with that at this point.
source: https://siriusbuzz.com/forum/showthread.php?t=4411&page=7
If a friggin deal was already done it would be announced. Anyone saying they have a deal and are waiting for a magic moment to announce it is a rookie who wants to blow smoke for attentrion. THINK ABOUT IT.
laughable
I could give 2shi$s if you ever mention pandora again- it is your site and articles – even though pandora is a competitor they are no threat to siri.
they are competitionb, and as millions of users keep being added they will be a bigger threat. If they land some premium talk content, they will become a bigger threat. There are rookies who have been calling pandora dead for two or three years now.
You state:
“Should Stern move to an Internet platform, it would mean trouble and the emergence of a competitor that until now many have refused to accept as a rival.”
Here’s what S&P Analyst Tuna Amobi says:
Stern, 56, credited by Standard & Poor’s (MHP) analyst Tuna Amobi for attracting as many as 2 million subscribers when he moved his show to Sirius in January 2006, suggested last week that he may leave satellite radio when his contract expires. Stern’s five-year, $500 million contract includes his pay and that of his staff. When the show made its debut, Sirius awarded Stern and his agent stock that was then valued at more than $200 million, saying he was luring enough listeners to warrant the payment. While Amobi says 200,000 to 300,000 fans may drop the service if he departs, customer growth overall will continue and Sirius can build sales with the money it saves on Stern.
“If he leaves, it frees Sirius up, cost-wise, to add more talent,” Amobi tells Bloomberg Businessweek.com in an interview. “The threshold where they’d consider letting him go today is a lot lower than before. They can grow without him.”
source: https://siriusbuzz.com/forum/showthread.php?t=4411&page=7
let me also add this:
As for Sirius XM, which has almost 20 million subscribers, Karmazin downplayed the idea that there would be an exodus of subscribers should Stern leave.
“They may have come for Howard, they may love Howard … but they listen to other channels,” he said.
As for what Stern is looking for in a new deal, Karmazin would not divulge details, saying only that Stern is “compensated very fairly.” When Stern joined Sirius in 2005, his contract was valued at $500 million, but that also included the costs of producing the show.
source: https://siriusbuzz.com/forum/showthread.php?t=4411&page=8
Hmmm . . I wonder what Howard thinks about that . . How would Mel know they “listen to other channels?” . . lets see what Howard has to say about this . . .
“Howard asked Scott what he wears when he bowls. Scott said he wears jeans and a t-shirt. He may have to get something nicer for TV though. Howard said he should wear a Howard 100 shirt if he gets on TV.
Howard said that things are getting weird around there. He said they used to get research on how many people are listening to the channels but all of that has dried up. He said that they’re not telling them anything around there now.”
source: https://siriusbuzz.com/forum/showthread.php?t=4411&page=6
I have long said that the subscriber losses if stern leaves would not be huge. They would be absorbed in 1 quarter. The implication of him going to another service will “legitimize” that service. That makes the competition stiffer.
Totally agree
Assume HS packs his bags and tells Mel Adios Amigo…..will the penetration rate go down? will the auto manufacturers sell less cars? will the SP take a 25 to 30% hair cut? short answer yes….. dust will settle quick and volume will rise to an all time high.
SP will recover with in few days …sounds like the old siri we all got use to…lol.
I personally think SIRI will get upgraded for not spending that kind of money on aging content!!!! Balance sheet would shape up quick not to mention 500 mil is no joke in todays market …Look folks, at the end of the day only Mel and Company knows if HS still have the fire to bring aboard an additional 2 million new subscribers….Negotiation will be based on what can do for sirius starting 2011!!! thats all she wrote!!
“SIRI Up In Stock Price But Signals Are Mixed”
Spencer says:
September 18, 2010 at 10:00 pm
and to a consumer this matters how?
Spencer, in reference to your statement about puts that activity seems to be shifting:
Mel will sign the folks that count and they will not announce the Howard deal until closer to the CC to max free publicity…and i am not a rookie at this…just sayin
auto sales historically go down in the fall, but 11m SAAR is all that is needed to meet Mel’s business model and that will happen despite any negative news media about slower sales.
The PPS broke out this past week due to Mel confirming at the BOA’s MC&E Conference that 2010 subscription radio revenue will be $3.1B, Year-end 2010 cash balance approaching $430M and 2010 revenue approaching $2.8B vs. consensus $2.82B.
This has provided the necessary confidence to the Street that the 233m debt due in 2011 will be handled easily and
the debt tower in 2013 doesn’t look quite so unmanageable. As this confidence continues to grow and revenue expectations are met the volume will increase with the PPS in my opinion.
Here’s one fact none of you can ignore …..Neither HS or O & A have an exclusive contracts with every auto manufacturers. With penetration and sales increasing yearly, not to mention SAAR rate to reach 15 to 16 millions by 2015 …give me a break amigo’s
One last fact….. Net subscriber adds of 583,249 in Q2 …….let me guess its all about Howard ….right!!!!!!!
Low Put/Call ratio alerts have been going out for some time. Check Google Finance.
Spencer,
I disagree. For Pandora to get closer to siri, they will need substantial investments in hundreds of millions while proving to their investors that their internet/mobile subscription model will be PROFITABLE. Their chance of being competitive with siri in the AUTOMOBILE is ZEEEEEEEEERO. Outside the auto, they will have to compete with siri and dozens of others like everybody else. Still, no one has content and existing contracts advantages that siri does. Siri has at least a five to seven year handicap before any one else in the content and deals areas. Your concerns make a lot of sense when it comes to the future of siri, say 5 to 7 years from now, which, I agree with you 100%, they need to start building today if they want to become a 50M-100M subscriber company. I would also use pandoras as a good excuse to push siri to prevent siri from getting too comfortable. However, for now a threat from pandoras is minimal. It will take pandoras years, if they are lucky at all, to build a business resembling siri with all these contracts and talents deals. The rules are the same for everybody, they will have to jump through the same hoops, and time works identically for evereone. Time is definitly on siri’s side for now and let us keep pushing them toward a much faster technological pace and true engenuity.
The Internet Radio business model is being forced into a subscription model. That means they will be delivering premium content outside the world of music. They have to. If they begin to land that type of talent, they will become a force.
The threat here is auto makers allowing smart phone integration without the types of contracts Sirius XM has. Sirius XM pays to be in the car. Smart phones do not. That means the Pandora’s of the world are getting to use the freeway while Sirius XM is on the toll road.
Sirius XM has a distinct advantage now, but others are much closer than they appear in the rear view mirror.
This is the prime reason why Sirius XM needs to lock up their content. If they do not they give the competition a good shot at being more “legitimate”
article states:
“Sirius XM is now at the top end of a trading range that has been between $0.90 and $1.10.”
Hey, I have some great news for David Bank of RBC . . Spencer just informed me that David Bank’s $1.00 price target is actually a “1 Year Price Target” . . . so David still has another 364 days left to nail it.
Given that at its $0.99 SP, Siri already trades at a “high multiple” (per Spencer) . . . and given David Bank’s “valuation concerns” and bloated SAC, I guess the fact that “somehow the stock has seemed to hold the line as this weeks trading came to a close” has Spencer and David quite baffled.
disclosesure: my apologies to any “consumers” who are reading this post as it will be of no interest to you.
SR….
I am not at all baffled. I have stated multiple times that I think SIRI is fairly valued at $1.10. What part of that do you not comprehend?
The fact that the stock has held the line does not baffle me at all. It is in an area that I think is fair. A year from now is another story.
Yes, you are correct. I guess I am not comprehending your wording:
“somehow the stock has seemed to hold the line as this weeks trading came to a close”
definition of “somehow”
adv. “In a way not specified, understood, or known.”
I guess I am also not comprehending that a couple of weeks ago, when Siri was trading at $0.99, you argued that Siri “already trades at a high multiple” . . . so, being that the multiple was “already high” at $0.99 I guess I was not comprehending that your opinion of fair value could actually be at an even higher multiple . . my bad.
ok, I’m all clear now, you are on the record; $1.10 SP is fairly valued right now . . and “somehow” it managed to hold the line; got it!
I guess I thought you were agreeing with David Bank that 1 year from now the SP should be $1.00.
Sirius XM enjoys a higher multiple than many other companies. You can see that easily. I never said that it does not deserve a higher multiple…just the fact that it is at a high multiple.
I never agreed with Bank that the stock should be $1.00 a year from now. One thing to consider with Bank is that he does not consider the NOL’s in his model (why he does not consider them can be debated). Those have a value and will allow for better performance.
Many passionate SIRI investors are looking for a pps of $1.35 NOW. That would increase the multiple to 25 or 30. Is that type of multiple justified? In my opinion not yet. A couple more quarters of solid numbers will give a high multiple more grip.
People love to talk about EBITDA. That is fine. What people need to remember is we are being fed ADJUSTED EBITDA. The devil is in the details of those adjustments.
Here’s another fact:
“Referring to competition from iPods and other portable devices in the car, Karmazin said there “has not been any impact” on the conversion rate from trial to paid subscriptions in vehicles with both factory-installed satellite radio and factory-installed iPod/MP3 player connections compared to new cars with only satellite radio.”
source: https://siriusbuzz.com/forum/showthread.php?t=4411&page=11
p.s. hey Spencer, hurry-up and write a new article already . . all these facts are giving me carpal tunnel.
The take rate is doing fine. My point is that they can’t rest here. If they do they give others the chance to wiggle their way in.
As smart phones and cars continue integration, you will see the competition become stiffer.
It’s funny when people try to understand this stock and try to predict which direction its going to go on any given day… I have watched analyst after analyst fail over 4 years of following SIRI, no one has even come close to an accurate prediction, so may as well just grab a beer and watch it like me.
After apparently topping out at 1.10 a share, we are peaking at 1.18 today, anyone else want to try and predict a top or bottom?
Spencer, did you see the call/put volume today? Looks a little more bullish…