Sirius XM Trades Under $1.00
The stock price of Sirius XM Radio have hit levels below $1.00, indicating yet another downturn in the equity. Analysts have begun to weigh in on Sirius XM, and while most have maintained their price targets and outlooks, the pessimism on the street continue to weigh heavily on the stock.
Yesterday we highlighted the opinions of CITI and Goldman Sachs, and today J.P. Morgan, RBC and Stifel have added their two cents to the pool.
Barton Crockett of J.P. Morgan, concentrates on the financing that will be due in February of 2009. He feels that the company cash reserves will not be able to simply buy out the debt and that Sirius XM will have to test the challenging credit markets. Crockett maintains a “Neutral” rating on Sirius XM radio, and highlights the debt, as well as cautioning that the OEM and retail channels are weak.
Also adding his opinion was David Bank of RBC Capital. Bank is still pegging Sirius XM as Sector Perform with a $2.00 target, but seems cautious, pointing out the weak auto market, weak retail, and the refinancing overhang. The analyst also commented about the lack of long term “visibility” on satellite radio.
Kit Spring of Stifel had a bit of a scary edge to his report today. While he maintained “Buy” rating on the stock, he adjusted his price target by 33% taking it from $3 to $2. Spring says that company guidance was negative, and adjusted subscribers and financials down for 2008 and 2009. The scary part for investors is that Spring noted a downside potential of “ZERO” if the company is unable to get the some of their debt refinanced. Spring does feel that the company should be able to obtain financing, but the debt overhang seems to be a heavy weight on the stock.
Clearly current prices have people scratching their heads and wondering what the best position is. SIRI for under a dollar seems like a bargain to some, but others still see more of a haircut in the cards. What everyone needs to understand is that SIRI is a speculative stock. There are issues that the company has to deal with, and an economy that breeds pessimism. Each investor needs to consider many factors, and their own trading style before jumping in or getting out. This company needs time. The question is whether the street is willing to give it to them. Should the company announce a resolution to their debt issues, the biggest overhang can be removed from the stock.
Position – Long SIRI
Friggin –
You want to talk about paranoia, call up SIRIW on AOL stocks and then look at the end of the link. It has /nab ????
I don’t get it. What is SiriW?
Stock symbol, that’s what I’m talking about. Look at it on aol stocks and then go up to link and go to the end and you will see “nab”
I dug deeper and found this on GOOGLE about what SiriW is:
“This looks like a bonus warrant. It is a stock “sweetner.” The buy in
opportunity has an expiration date. Up until then, the stock may be
purchased. There are not shareholder rights associated with the stock
and no dividends due to the holders of such stock.”
So now you know. It has to do with “warrants”. As Officer Brady from South Park likes to say, “MOVE ALONG! THERES NOTHING TO SEE HERE!”
Lol.
Friggen –
Just getting paranoid about the conspiracy.
Thanks.
Right there with you friggin on everything. Often contemplate if Mel has any compassion for the financial disaster hes put his shareholders in???????????????????
Took me better part of an hour to wade through all the posts above. Oh, to be able to do a Vulcan mind meld with Mel right now….
Hey Plowboy, I don’t know if I agree with you here… the last time Sirius traded like this (under $1) was the LAST time that Sirius was working on their debt refinancing at the end of 2002 and into 2003. Sirius traded well under $1 for 60 days in 2002, then and addition 90 days a bit later in 2003. However once their debt was completely refinanced… the stock rose.
IMHO, I think we’re seeing history repeat itself. I could be wrong, but I’ve seen this before — in both XM and Sirius at the end of 2002. You get this crap taken care off and focus on operating and controlling costs, I think the pps will take care of itself.
——
Mel doesn’t give a F about common shareholders. It’s obvious. Something doesn’t smell right. I’m leaning towards conspiracy theories. He seems to be want the stock down. but why? buyout? i don’t effin know… F!
PPS hit .39 during wk of 3/3/03.
OK, so looking back to the worst tank period is a downer. Well on the caffiene side, how about this little gem in Forbes Market Scan earlier this evening:
“Contrary to investors, J.P. Morgan analyst Barton Crockett remained cautiously optimistic. “Near-term headwinds may continue to weigh on the shares,” he said. “Longer term, we expect the company to be able to refinance its debt and for earnings to ramp sharply.”
Anybody miss that “ramp sharply” part? –WAY long SIRI
As many stated the debt holds the key to pps. Hey Friggin. I read with interest the conspiracy point of view. However, most retail shareholders own the stock because we like the product. Just like the books say to do. Invest in the products you like. So……………If Mel screws the retail guy. He’s screwing the subscriber of the service. I guarantee most shareholders have a sat radio. It’s a losing game for Mel to continue to post a stock price on the ticker each day that we are posting. He has to know that. Eventually we will all get pissed off and cancel our service.
That speech has proven what a donkey, Mel is. What do we do with donkey’s? We put them out to pasture. Mel should be put out to pasture for giving such an idiotic speech at a time when the Street is looking for any excuse to hammer any stock into oblivion.
The Street has hated this stock since the merger was approved and more debt was issued, as far as I recall.
I hope Mel has the connection to refi some debt at some very favorable terms, or this stock will stay below $1 and get delisted from NASDAQ.
But this stock looks like it’s drowning. Where’s the incentive for someone to loan money to company who’s stock price has fallen to 40% of what it was when the merger that was supposed to save them was completed and in such a short time?
There is no incentive, and much less so after Mel’s stupidity conttibuted to a further collapse in stock price.
I call upon Mel to RESIGN.