Sirius XM Radio Investors Singing Blues
The merger is finally here. After a long and drawn out regulatory process, the birth of Sirius XM Radio has many investors singing the blues. The question is how long the street will stay on the blues channel, and will the next channel be more upbeat?
With the converts arbitrage action panning out during the trading of yesterday and today, it may well be that the stock has stabilized, and perhaps even marked a strong bottom that should become a very strong support point.
Many investors still have various questions, and the process of the transition still has a few more days to unwind. XM shareholders will see their accounts have shares that are able to be traded by this Friday. Those that were short XM will need to settle their trade, as the short positions do not transfer over. The XM shares you borrowed to sell short were bought by someone else, who has already (in theory) converted them to Sirius. Because of this, Friday may be an interesting trading day that sector followers will want to watch.
So how does Sirius XM Radio go from singing the blues to rockin’ and rollin’?
Strong fundamentals, good PR, executing the promises as committed, and keeping the street in the loop with guidance that analysts and investors can sink their teeth into. For the past 18 months SDARS has been marching to the beat of whatever suited any particular investors fancy. A consistent beat will deliver confidence.
Merrill Lynch analyst Jessica Reif Cohen issued a report yesterday where she reiterated her $4.50 price target. Cohen is a media analyst, and one who’s opinion I place a lot of weight. According to Cohen, “Strong operating leverage and high contribution from new subs should drive an acceleration in EBITDA and FCF. Improving trends in retail and improving conversion rates in the OEM channel should allow Sirius/XM to capitalize on the more widespread availability of satellite radio in the 245mn U.S. auto fleet. We reiterate our Buy rating and $4.50 price objective for the combined Sirius-XM”
Cohen sees what is in essence a “THREE-BAGGER” right now. Put a quarter or two of combined operating metrics in the mix, and the confidence of investors in analysts as well as the company can improve.
Sirius XM Radio should schedule an investors conference that outlines initial projections, the path the company is taking, and expectations. This conference should be available to everyone. Investors have a glaring need to know the direction SDARS is headed, and they need to hear it from Sirius XM Radio management first hand. Do not wait for the quarterly call. Do not wait for the annual meeting. Do it now.
The fundamentals will take some time to prove out, but there are activities that can happen now that will also show the strength of Sirius XM Radio. Good PR is key. Getting the news out. Branding the Sirius XM Radio name needs to happen. Get signs into stores, and let the world know that satellite radio has been reborn. That’s all well and good, but other PR needs to happen as well. Sirius XM Radio needs to correct the damage done by the National Association of Broadcasters. They need to prove to investors and the public that the company has integrity.
- Announce the first Open Access manufacturer with pride.
- Announce the informational and minority program with pride.
- Embrace the Public Knowledge’s of the world for their opinion on how to handle the informational programming.
- Announce that those that already have a subscription to both services can now get a family plan rate on one of the subscriptions.
- Announce when the repeater towers are in compliance with pride. Don’t let past FCC discretion’s jade the vision of the merged company.
- Spell out exactly what lifetime subscribers and those with long term contracts will get for service and why. My opinion is that lifetime subscribers should get the service they currently get, but also get 3 months of the “Best of Both” free as a trial for being loyal subscribers. If someone still has over 1 year left on a contract give the a one month trial of “Best of Both”. This move was not required by the merger, but would help demonstrate that the company is a stand-up company that is looking out for consumers.
Do you hear the music changing? Steps such as these are confidence builders. Confidence is what the street needs. Not just in the bottom line, but in the company. Build a reputation of a premier media and entertainment company, and prove the naysayers wrong by good company metrics, being a good corporate citizen, and reversing the battle fatigued feelings that many SDARS investors have.
The merger is done, and there was a smattering of claps from the street and an undertone of the blues. Management now needs to step up to the podium, and turn those isolated claps into a thundering chorus of WE WILL ROCK YOU! Get the street as well as consumers behind this company so that it can prosper.
This Is The Spirit Of Radio. It is alive in everyone. kindle the fire, and let everyone know that Sirius XM Radio is the real deal.
Position: Long Sirius, XM.
Mel K. will be on Stern tomorrow. I think the blitz will start. Interesting to see if he inks Stern for 3 more years. Bet on it. The stock is lower than I thought it would be..but I knew the equity was in trouble after the GS report. Bottom line…Mel is motivated to prove everyone wrong. I think he will.
Why isn’t Mel on CNBC or the mainstream media?
I find that outrageous. Talking to Stern is great and all…but COME ON!
18 months we’ve been waiting for Mel to speak to us. Talking to a bunch of retard Stern fans isn’t exactly going to change hearts and minds.
Mel doesn’t need to speak to the choir….he needs to speak to the doubters and naysayers on wallstreet and the battle fatigued on main street.
Wheres the plan Mel? Wheres the celebration?
VERY dissapointed.
Heck…Mel hasn’t even updated the Sirius website yet! You’d think after 18 months they’d have one designed and waiting in the wings.
Makes me nervous to think Mel and Sirius have been twiddling their thumbs for 18 months instead of developing a post merger plan.
I thought Mel was a “MASTER”?
While I’ll admit that Mel has been very quiet I do think that there was a lot going on behind the scenes that we don’t know about. Don’t forget how close the vote was and the type of people he was dealing with. Maybe he felt that he had to be quiet to make sure it went through. Now that the merger is approved I would expect him to take a cue from Tyler’s blog and become very proactive. At least I hope that he will.
Tyler – well written! I think you should forward this message directly to Mel & his management team.
When will you change SiriusBuzz to
“Sirius XM Radio Buzz”?
Branding is everything!!
Mel could not press the points because of the merger. NAB had the advantage. Its SAT advantage now. I think its a three year process…I think anything above 21-22 million subs is pure bottom line.
Yes…well written. But is this just more of the same old same old from the Sirius shareholder playbook? To lift us up with words of hope after we’ve been knocked down?
In the beginning it was the promise of Sat radio and Sirius rose to $60 a share before losing it all. Then it was howard. A pop and then drop. Then it was the MERGER.
Only this time NO pop.
So when I read Brandon’s writing…yes…it triggers that positive hopeful response like pavlov’s dog. We so want to BELIEVE that will happen.
But I think I’ve finally learned to step back. To REPROGRAM myself. After years of disappointment and battle fatigue….I see the pattern.
Only this time…it smacks of FINALITY. The merger finally happened yes…but after this it’s over. If this doesn’t work…there is nothing left to hope for. No bounce back up.
So that little voice in my head is saying, SHOULD I BELIEVE ONE MORE TIME? SHOULD I LET MY HOPE OVERCOME THE ODDS AGAIN?
The answer is no. It is finally too risky. I like you all have lost too much. Some could say at these levels why not just go down with the ship? Risk it all? You’ve come this far? And besides…how much lower can it go?
All this sounds like it makes sense. But will I look back and say I SHOULD HAVE GOTTEN OUT??? Like I have so many times before?
Just because you’ve ridden a stock down so much doesn’t make getting out wrong.
Because if there is a 10 to 1 reverse split or bancrupcy and then Mel starts over again with a new ticker….The current shareholders will BE WIPED OUT.
So this small amount that I cling to….while small….if I sell now I still keep. Yes the pain of what I’ve already lost makes it HARD to sell.
But if I could step back and feel what it would feel like to lose it ALL….to once and for all let go of that GAMBLERS mentality that kept me at the table despite drop after drop in this stock….then perhaps I can muster the courage to sell.
And for the first time feel GOOD about my decision with this stock.
But are we all like deer stuck in the head lights still clinging to hope?
When I read articles like this….I think yes. Because it SOUNDS GREAT. I get that warm fuzzy feeling of hope begin to stir.
But then I think how I’ve heard it all before. Followed by the crys of disappointment and heart ache.
I just don’t think I can BELIEVE this time.
Good luck
Sirius XM should have Howard & Opra on stage in Unity as they make these annoucements
Liam,
I see and know and feel exactly what you are feeling, but don’t sell at the bottom and remember that the one big difference between what you are saying about the history and what Brandon is saying is that it truly is a new beginning and a new company that has leverage and the ability to cut costs with one major competitor on your team now.
At least wait for some kind of rebound or snap back and then if you still feel the same, sell and move on.
Don’t let th big guys win and squeeze you out at the bottom. This should all settle down by end of week and confidence will likely build even if that just means 2.25 or 2.50 in the next few months.
I feel like such a complete moron for believing in these people and this product after this. Years of pouring money into this and I could have had a better return by putting money in a shoebox and burying it in my backyard. For those that bought near the $4 range, maybe wait it out for another year and we can ride the huge 50% increase to $2.25 and only have lost just under 50% total.
I respect what you’ve done on this site Tyler, but it’s time to admit shareholders have gotten completely screwed and there is no silver lining to this. The only investors that will be rewarded are the ones who were smart enough to not invest in satellite radio until today at $1.50. The rest of us that set up the foundation for this company will get nothing but the mere possibility of losing a bit less than we already have.
What a joke.
I invested into Sirius because I loved the products. I love radio and infotainment without the added commercials.
I actually researched cable, but felt that Satellite radio gave me everything I was looking for and more, without the talking heads.
I invested because I loved the product. And I feel Sirius Xm Radio is MORE than just RADIO. It’s community, and this is something you do not get with the slackers, pandoras and iPods.
There is a dinstict culture, if you will, among Sirius – XM listeners. And management, going forward, need to brand this culture and community.
Follow the amazing example set before you with Starbucks Coffee. It’s not about the coffee but the culture and community. When you sip that coffee, it represents success. It’s an amazing company with a culture and a social conscience.
Thank You Tyler for mentioning that we need to hear from management. In a previous post of mine on SiriusBuzz, that was the one question I wanted to know: “when will we hear from me”. I don’t want little quotes in a press release; I want him to come out and discuss the companies vision, the business transaction — what went right, what went wrong, what could have been improved. People listen when Mel speaks. And as I see it, he has had a huge personal victory in closing this deal and acquiring capital, and it’s a big achievement for both Sirius and XM Corporately. Now he needs to come out and address us, with some command presence and confidence and show us the plan.
I know its only been a few days since merger approval.
But Mel should have spoken on tv already. He should have had “rebranding” commercials already to go. The website should have been updated to reflect the new company…there is not even a tiny BLURB about the merger on it!!!
Mel is just as bad as that asshole cramer…..I have never seen a more outrageous annialation of stockholder wealth in us history. Mel karmazin is a corporate jihadist and looted the treasury of this company. He could have gone in many directions for capital and fucked the very stockholders that made this fuckin company….I hope that bastard gets anal cancer
Liam….
I got the picture in this article from the Sirius website. Tab number 1 on the main page
“Sirius and XM merger Complete” is right there
Don’t get me started on Cramer. What he did is worse than the NAB or the FCC. He took it upon himself to be the public voice of suffering shareholders…and then did a COMPLETE 180 and stabbed us in the back.
NEVER ONCE did he mention dillution as a danger. In fact the ENTIRE time he was raging against the FCC and pumping Sirius…saying it’d pop to $5 or $6 INSTANTLY if the merger was approved….he said BUY BUY BUY!
Right up until his buddies at GS downgraded Sirius with a ridiculous $1.75 price target.
That was the beginning of the end. Cramer suddenly got quiet. What happend to that VOW to fight till the end Cramer?
Then after the merger was approved….CRAMER says the COMMON STOCK IS WORTHLESS! After he assured everyone it was a BUY BUY BUY right up until the end.
Cramer is the worst of the bunch because he gained the public trust and then threw them to the wolves.
He COULD have raged against the drop like he did the FCC. He could have created a rally. A pop. Instead he not only jumped on the bashers bandwagon…he became their FUCKING CHEERLEADER!!!
FYI – I have E*Trade and my XM shares have converted after hours tonight, so maybe others will have the same.
As far as Mel speaking, I think it’s best he lets the dust settle for a day or two and speak when everyone’s blood stops boiling a bit.
But hopefully by Friday now that shares already converted, at least for me.
Good Luck all on the bounce back and improved news flow.
“This Is The Spirit Of Radio”
So why do you play limelight on your weekly show ?
Tyler,
Please forward this intelligent post to Sirius headquarters attention to Mel. You make some good points. Mel should make a public statement with Oprah and Howard. That would be attention grabbing. Best to all of you and our financial futures. I have a very long position and cling to the hope that Mel will do the right things in the right order at the proper time.
Dust to settle? Blood to stop boiling?
He OWED us an announcement the DAY it went thru.
His words….his EXCITEMENT COULD HAVE HELPED alter the course the stock took the last couple of days.
By NOT speaking. By not coming out full of piss and vinegar and PROCLAIMING GLORIOUS VICTORY….he helped change the course of events for the WORSE.
It pisses me OFF because for 18 months Mel’s hands were tied and mouth was gagged. He couldn’t answer the parade of bashers and analyst reports.
But Friday after hours ENDED ALL THAT once the merger was approved.
He made NO STATEMENT all weekend. His words could have set a DIFFERENT TONE for MONDAY.
But for him to NOT SAY ANYTHING ON MONDAY AND NOW TUESDAY….is EVEN MORE CRIMINAL than what the FCC AND NAB DID.
He TOTALLY BETRAYED THE SHAREHOLDERS.
THE FIRST TIME IN 18 MONTHS THAT HE WAS ABLE TO ANSWER THE CRITICS….HE DIDN’T.
The market is 75% emotion. He KNEW the pent up emotions. HELL…HE LIVED THEM as our CEO.
For him to NOT HAVE SAID ANYTHING on the EVENING, WEEKEND…and NOW 5 days SINCE THE APPROVAL is the single WORST THING THATS HAPPENED TO THIS STOCK.
He BETRAYED US.
Terrmr….
LOL….Anything bu Rush is good for me. I chose limelight because it suited my ancy at the time. At some point I will switch it out, but was in hops that a reader or listener with ability could create a cool bumper for me.
I jest need to make the time to do the new bumper i guess.
JM my shares converted tonight as well on etrade…
I hear you Tyler. I was just making a point. They dropped the ball. A little Tab mentioning the merger is not enough.
They should have had a complete redesign of the webpage. Mel should have spoken. I’m sorry. It was just a very tepid response to something we’ve been waiting for FOREVER.
And don’t you agree that Mel COULD have DRASTICALLY altered the course of events on Monday if he had blitzed the media with interviews?
I am flabbergasted how he’s been virtually non existent since Friday’s announcement.
Like it or not…Mels ugly mug is the FACE of this company. Like Steve Jobs is to Apple. And look what happened to Apple’s stock when Jobs was in hiding and rumors of him being sick caused the stock to PLUMMET…even after a SPECTACULAR quarter.
I may sound like an armchair quarterback here, but these things MATTER. And in my humble opinion…MEL dropped the ball here.
He had 18 months to prepare for those crucial days after the approval. What is said during that time has a profound effect on the course of trading.
Since Mel was a no show….traders looked to the bashing going on just like they had done for the past 18 months when Mel was forced to be silent.
I know Mel will unveil his plan over time. But he made a tragic error of judgement by not throwing down the gauntlet these last few days.
Did he think the mere fact the merger was approved was enough to overcome the tsunami of bashers that have pummeled the shareholders these last 18 months?
He should have come out swinging. He could have changed the course of events on those first crucial trading days after the merger instead of letting the bashers set the tone.
THIS is MY POINT. He didn’t do enough.
I would never wish cancer on anyone — HOWEVER, I could not agree more that this has been an “OUTRAGEOUS ANNIALATION OF STOCKHOLDER”.
Mismanagement, first by Sirius, later joined by XM, brought both these companies down. Sirius, today, at 1.50 is overpriced, severely.
There is little hope that satellite radio, as most of knew it, will ever become profitable. We WILL see major cutbacks on talent — and Stern, the guy who destroyed Sirius, will be at the top of the list unless he is willing to take a HUGE pay cut.
I’m glad its over. But owning shares in this company is for suckers.
Liam…
The coming days will offer greater exposure. There is a lot happening, and it is better to start fresh after the confusion is settled out. However, that is just my opinion.
I think it would have been good if Mel had already spoken in public….if nothing else than to make a brief statement and say that a press conf. would be happening Friday (or whatever day).
When the merger first was approved I was excited because now they can move forward, but I am getting the feeling that it is moving towards bankruptcy. I hope this is not going to be the case, I need some more feel good articles because this really sucks
Yeah. I hear ya Tyler. You’re right. I am just frustrated as all hell.
And the fact that our leader hasn’t spoken to rally the troupes just put me over the edge for all the reasons I explained above.
From this point forward…answering the critics immediately is CRUCIAL. What fed this downward spiral for so long was the constant unanswered bashing. The shorts became drunk with power.
I applaud Mel for his hard earned victory. I don’t think anyone else could have done it. But he REALLY needs to speak SOON.
Until he does the shorts and bashers will continue to run the show. And it just kills me to see that after all we’ve been thru.
I don’t expect the stock to EXPLODE upwards. But I want the satisfaction of seeing Mel SWING back instead of turning the other cheek like he was forced to while the merger was in limbo.
Anyway…this battle fatigued shareholder is going to bed.
Thanks for all you’ve done Tyler. I’ve lived vicariously thru this site thru this whole ordeal. Keep up the good work.
Liam,
Again I do agree with you 99%. I do not think though that Mel’s cheerleading during this convertible stock sale today at the price of 1.50 would have helped at all.
I think it will have much more of an impact now that merger is officially approved by FCC, closed by Siri and stock sale complete (XM shares converted)
I do believe tomorrow might be the ay or at latest Thursday.
At least he’ll be on Howard Stern tomorrow – unreal.
Liam, Listening to you talk about Mel as though you didn’t already know that the debt issue needed to be resolved is unfortunate. We are all losing tons of money as it is resolved…If we sell. When Mel speaks out “Finally” it should not be about: “Oh sorry folks, we got to back our new asset with some stock so we don’t gey porked with high financing, which means your pent up excitement is going to take a hit in stock price while we do this”. Not only is that not what I want him to come out and say, the SEC won’t allow him to and still do the debt transaction. Everyone talks about how long they’ve waited for this merger and then “Give me the Money” as though they ignored all the complications that have made this to date, a “Speculative” and “Losing” investment. My understanding of your comments on Monday were that you said “Uncle” and sold, are you now back in? If so you have more shares today than yesterday, If not then what is your plan?
I don’t want MEL to talk about that!
I KNOW what the debt refinancing did to the stock.
I WANTED to hear Mel come out with some PASSION! Some emotion.
Like I said above. Something POSITIVE to counteract the NEGATIVE bashing.
Mel COULD have said SOMETHING to the troops. By not saying anything….he left a HUGE void for the bashers to fill.
Isn’t this obvious????
Liam,
I’m not trying to be dispassionate with your being upset with the drop in stock price or your financial loss if you sold. I am trying to say that you and I are not renegotiating debt, struggling with the FCC, and timing our announcement for a Fall Product line that will knock existing subscribers and new subscribers sox off. I invested in Mel’s management of this company over the long haul, not impatient and dissatisfied investors opinion of management because the stock didn’t do what they wanted. This merger is just inked, some shares have been consolidated, most debt refinanced and accounted for, and your pissed that he hasn’t explained it to investors as it happened. I think that is totally unrealistic.
Any chance Mel sold the shares at a 20% discount to drive the common stock price down so he could buy XM at a discount? Just a thought. Being a faithful shareholder in Sirius XM common hurts! However, I am looking forward to becoming a subscriber and buying my first interoperable satellite radio this Christmas! I am not a current subscriber as I have been putting it off until after the merger was complete.
In defense of Cramer, I did see a segment video clip on the street.com where he was telling everyone to be careful due to the debt refinancing and a possible dilution of the common stock the week before the merger. He also said that buying the bonds were the way to play this as the merger took way to long.
Buy value stocks only!!
Ser..Sirius, faithful shareholder but not yet a subscriber??? How does that work? Sorry, I just can’t understand how the two, together are possible. Certainly you must have experienced the product before Seriously getting Sirius with your investment.
Here’s where the three-bagger is. The losses from anyone that believed in satrad.
When the promises continually, continually flow, and when the prices continually, continually drop, someone’s lying and it ain’t the stock!
Tyler,
You should be heading the investor relations department at Sirius XM Radio. Thank you for being the one voice of reason amongst all of the doom and gloom.
MEL-
ITS TIME TO GO PUBLIC HARD & FAST !!!
YOU NEED TO EXCITE NEW POTENTIAL SUBS, NOT CURRENT ONES !!! HIT THE NETWORKS.
SINCERELY-
ONE BROKE STOCKHOLDER
The most recent $550 million convertible offering from XM has been so mischaracterized by the press that it borders on criminal behavior. Sirius LOANED the $440 million worth of shares to the underwriters to SWEETEN the deal and guarantee its placement. The loan has to be returned when the bonds mature. The media keeps reporting this as a dilutive offering . Further, they claim it was discounted to $1.50, when in fact that was the fixed price it was required/is required to be SHORTED at (well $375 mil of it). Basically Sirius is saying, we’ll loan you shares BUT if you choose to SELL them it’s got to be for less than the price of the convertible bond. Otherwise, the bondholders could potentially recover all their money up front and get 7% on $550 mil for free. Unfortunately for Sirius stockholders, Sirius’ closing price the day before (which was possibly manipulated) determined the price of the convertible bond, which got favorably priced at $1.875 per share. This, in turn, determined the hedging/shorting price – $1.50. The end result is that $1.50 becomes a FANTASTIC opportunity for all shorts trying to cover. However, it is also a fantastic opportunity for anyone wanting to buy cheap shares of Sirius. Well, thanks to our friend Cramer who flat out told people NOT to TOUCH the common stock and the totally distorted explanations provided by the media, many Sirius and XM stockholders probably missed out. Anyway, the good news is only 23 million shares were sold at $1.50. If the share price goes up the convertible bond holders won’t WANT to hedge at the $1.50 price. Instead they will simply RESELL the bond at a higher price on the secondary market and pocket the difference. On the upside, the market won’t be flooded with those extra shares. Anyway, that’s what I make of it.
Tyler/Brandon – I find myself waking each morning and running to my computer not to check if the merger has been approved by the FCC but rather to check if SIRIUS XM RADIO filed for bankruptcy. I can’t help but think that this might be Mel’s master plan to get financials in order since he has yet to address shareholders or wall street. Anyone have any thoughts? if they were to file obviously this would negativly affect current shareholders. But how would it affect current refinancing and restructuring of debt? If they were to file wouldn’t they have done so rather than putting together this elaborate restructuring of debt? How would filing affect those involved? What would be the negatives for the company in filing? Anyone care to take a stab?
Cramer went on and on about how about how the way to play Sirius was to buy the convertible bonds. Well, the bonds were a private offering that has already been allocated. The public will only get to buy it at an inflated price when it gets resold via a listed on the secondary market.
Cramer went on and on about how about how the way to play Sirius was to buy the convertible bonds. Well, the bonds were a private offering that has already been allocated. The public will only get to buy it at an inflated price when it gets resold via a listing on the secondary market.
Everyone got their Mel on CNBC at 6:00 for about 10 minutes. He seemed to do well, but ran out of enough time to really explain things better. All and all it was a good start.
I read Mel would be on O & A today as well as Howard Stern.
I hope they have the combined company shareholder meeting real soon.
Yeah, Cramer tells us to sell as the big money loads up on cheap shares.
Following the lead of terrestrial radio stocks, with many being down 90% into the penny-stock range, hasn’t anyone figured out that consumers have little interest in “radio”, anymore.
I’ll take 10 cents /day for 4 days straight to get back to the $2 level.
This doesn’t seem unreasonable as a decent level as we wait for the positive news flow of steps the company will be taking in coming weeks/months leading into holiday season.
I feel positive that the worst is behind stock and company.
Tyler, what do you think will happen with the 2009 convertibles? Refinanced at a higher rate or will Mel try to buy at least 200 million out if he has enough cash?
COS 1000,
I made a “ton of money” in Taser (TASR) as a momentum play even though I have never owned or been stunned by one of their products. I have owned BAC for 10 years, buying on the dips while never selling and I consider myself a “faithful shareholder” even though I don’t use that bank. It is possible to be a “faithful shareholder” without using a company’s product. “SERIOUSLY SIRIUS” may not be as sophisticated as you but that is NO REASON to be condescending. Play this game of “One-Up-Man Ship” somewhere else!
It’s Sirius World,
Comparing an personal entertainment company, utilizing a new technology to deliver music, is quite different than sampling a TASER or investing in Bank of America. I was simply confused by the investment strategy. Investing in consumer retail and entertainment broadcasting company without sampling the product is puzzling. So I asked the question of Seriously Sirius. As far as “one-up-man-ship”, not my intention, so please take of your super hero cape and let the discussion go on. You made your point, and I think the companies you invested in without sampling the product would be a valid, but are not a fair comparison to my point.
I’ve Sat Radio in the company car for years.