Stifel Nicholas Weighs In On New Guidance
Stifel Nicholas analyst Kit Spring weighed in today on the new guidance provided by Sirius XM CEO Mel Karmazin, at the Merrill Lynch Media Conference yesterday. As I mentioned in a recent article, the low-ball estimates given by Mel would result in analysts lowering their forecasts and readjusting their models.
Referring to the new guidance as “mixed” although a “net negative,” Stifel Nicholas is maintaining its buy rating and has lowered its price target to 2.00 from 3.00, with the belief that 4.00+ is possible under the right circumstances.
Kit also seems to be as confused as the rest of regarding the low-ball estimates given for 2009, noting as we all did that the estimates given did not “jive” with the increased penetration rates that are being presented.
Warning of downside risks, Kit also hinted of the possibility that the company could be sold in lieu of not finding adequate financing of the 2009 converts.
Position: Long SIRI
Spring also noted “BANKRUPTY” as a possible alternative although less likely. Thought I’d add that since you left it out.
A buyout in lieu of being able to refinance the debt?
At this price I wonder why Mel hasn’t been more agressive.
Yes there is debt…but it’s NOTHING compared to the long term earnings and growth of Sirius and to the HUGE market cap of the potential BUYERS.
WHY is Mel letting this sink lower?
WTF is GOING ON?????
What he said was the potential downside was zero, if and only if sirius could not secure financing or sell the company. Not once did he mention the word bankruptcy.
We are down over 20 FUCKING % today alone!
WE NEED A SOLUTION AND WE NEED IT NOW DAMMIT!
All I can think of is how Mel ABRUPTLY ENDED yesterdays conference. It sounded like he dropped the mic and ran off stage.
WTF is GOING ON??? We deserve answers from our CEO NOW!
MEL and SIRIUS has to address the financing
TODAY !!!!
this selloff is insane and unexplainable.
Brandon…WHY on earth wouldn’t Mel be able to SELL this company? It’s so insanely undervalued right now it’s not even funny. At this price EVEN with the debt it is an absolute steal.
I just don’t get it. It boggles the mind how Microsoft couldn’t close the Yahoo deal for how many BILLIONS of dollars…and yet they have Sirius being served up on a friggin silver platter…and not a PEEP from them! Un-be-fuckin-leavible!
A Sirius enabled Zune would for the FIRST time be a legit threat to Apple’s mp3 dominance.
It’d be CHUMP change to buy up SiriusXM at this price….NOT TO MENTION CONTROL OF ALL THAT FUCKING SPECTRUM!!!
ARGH!
Mel seemed to have “lost it” when the questioning got going. What was that remark about advertising on terrestrial radio being awful, and the remark about he might lend the company money, and then abruptly announcing the call is over. It was if he was pissed off and was giving flippant answers. It was not characteristic of this hard working, very intelligent man. It was as if he was finally blowing off steam after having bit his tongue for 18 months. But why in public, and to “analysts”???????????????
“Downside is potentially to zero if SIRI can’t refinance its debt nor sell the company – a scenario that we believe is plausible in the current environment, but looks to us to be a low probability outcome,” – Spring
My mistake. I thought ZERO meant BANKRUPT.
Brandon – “ZERO” implies bankruptcy.
Unless something is announced shortly regarding a term loan for the Feb converts, the stock will continue down to .50 cents.
I wanted to be out at 1.50 & didn’t get out. Then I would have been happy with 1.40, but wanted to give it one last shot of a bounce on Mel’s much hyped post labor day speech. Then finally I didn’t exit yesterday when it rebounded back to 1.15 hoping for a bounce in the a.m. Well I decided to get out at .97 this a.m.
Maybe a short-term wrong decision and one that I hope is right for myself, but torn because I have family members that are in and feel they want to ride out.
But after hearing Mel not sounding too optimistic, making comments that he hoped he would not have to take $ out of his own pocket amongst other things, I have finally lost faith and cannot risk losing it all.
My opinion is that with stock under $ 1 that they could only dilute further with replacement converts. The financial markets are in absolute turmoil, car companies in danger of bankruptcy, loans for cars difficult to come by, and on and on.
I’ve been hanging on hope for 5 years, waiting for that big news. Now the hope is gone except for a miracle offer buyout at a higher price or a 25% chance in my opinion of getting favorable financing for the Feb converts. Even with that, then there is 400M XM debt in May and another 300M XM converts in Dec.
1 billion required in this financial market.
I am not writing this e-mail to hope stock goes down further because I don’t even think it is worth the risk to get back in anymore, except for maybe quick in and out trade. But this can be done with any stock, right ?
I truly finally feel that the debt load will overtake this co. I can’t lose another 15 months of my life hoping and waiting and getting the balance of my $ siphoned out of me.
This company will be a powerhouse one day only if they clear their debt with bankruptcy. If they just refinance debt, it will be hard to grow it because of the interest payments and future obligations in 2011 & beyond.
My feeling is a 75% chance of much further dilution or bankruptcy. Cramer hurt us all, but looks like he was right and maybe trying to protect what he knew was coming.
Hope for all still invested that I am wrong and if you are looking for an exit point you get it, but this boy is done until debt is cleared up. Maybe buy some shares at 1.50 or so in a year or two if that happens.