Will Sirius XM Get to the Teens?
A stock price that was beyond comprehension only three months ago is now edging ever closer to actually happening. As of this writing, Sirius XM Radio is in danger of dipping into the teens. This will place the equity at a new all time low, as well as bring it further away from the $1 Billion market cap that would allow the company to access a $100 million credit facility through Loral.
The company has expressed that they are active in trying to negotiate financing for the $200 million due in February of 2009, but as yet there has been no indication that acceptable terms have been reached. The debt issue and frozen credit markets have taken their toll on many companies, and Sirius XM have not been immune.
While company guidance remains that profits are around the corner, the street perception makes any such projections difficult to believe. Negative headline after headline mire the entire investment community, and at this point a recession seems to be a self fulfilling prophecy. The economy is confused, and retailers are so worried that they are initiating Black Friday sales a week and a half early in hopes of prying money from consumers who seem more apt to hold onto their dollars.
With this being only Tuesday, we could be in for a rough week, and at this point, unless there is positive news to reverse the trend, a visit to the teens seems more and more likely. At that point, people will begin to wonder whether you can get a share for one dime!
Position: Long SIRI.
Within the past week or so Homer985 made an interesting post showing a book value/liquidation value in bankruptcy of about $0.40/Share.
Homer, if your out there could you please repost that here, with any adjustments if needed . . . can’t remember where it was posted originally. Thanks!
Pardon my ignorance but…
Why does SIRI have to have no debt?
Every company on the planet carries debt don’t they?
Isn’t is about being to handle the debt with enough cash flow to service operating expenses and pay down debt over time?
SIRI has 600+million coming in don’t they?
imromo24
It is not your fault, it is mine, every time I buy it comes down, every time I sell it goes way up.
6 months ago I would sell at 2.9, then it goes 3.25.
Then I buy 2.70, it goes 1.80
I buy 1.60, it goes 0.75
I buy 0.60 to average down, goes 0.50
Yesterday I buy 0.25, now to 0.20
I guess no point of selling now because I am sure it will go up
Most stocks are 60-75% down YTD
most Banks, insurance, energy funds are about 80% down. Fedility select energy fund $ 40 from over $119 a year ago. Who knew !
Avis-budget is trading 0.60 from $ 18 a year ago.
I hate it when all those posters here say, well you should have done your home work before investing in Sirius !!! Well, if they are that smart they should work for Lehman brothers or GS and saved their collapse
I can buy 5X as many shares today from the last time I sold and I can’t pull the trigger because it just keeps going down.
Maybe at .15 cents, but I’m just concerned it will just go off the market at this point.
How do you get loans for 910M for debt when your market cap is headed for 1/2 that ?
The loral 100M looks like another thing gone wrong with market cap well under 1 billion.
I’m sick – lost tons of $ in the last 6 months on this & my family lost a crapload more as well, which makes me even sicker.
How about the (SEC)Sleeping Exchange Commission that are ignoring the spiral down towards a dime.
whats the odds that….when the stock hits 10 cents, SIRIUS can buy back all outstanding shares. That is when the real short squeeze will begin in earnest.
Does it make any sense why the recent purchases last week of hundreds of millions of shares bought by institutions. Do they know something we don’t?
Good comments about every company having debt. Also nice to feel better about the Feb debt. I only worry about BK. If we can get past this recession and into the recovery we will be fine. Now everyone go out an give the new XM portable as a Christmas gift. The 4th quarter results will be critical for survival. A plus there would be really impressive. If the Feburary debt gets taken care of I think a lot of good things will happen. Question for anyone: can you request that your SIRI stock not be loaned for shorting? Seems like I read that once.
I did everything I could for you guys. I sold 11870 shares at 20 cents. Lost $17,500. I am now convinced the refi terms will be horrific and/or the dilution will be huge. I think the only way this thing gets any kind of pop is if a Mr. Softee, Apple, Google etc decides they want to be in Sat radio….The democrats bled us to death….GOOD LUCK
Good thread. Excellent article to get the juices going, and great replies. I am so tempted to pull the trigger but will not, again for lucky number seven buy, until there is more certainty one way or another.
Mr. Karmazin,
The time has come for you to stop pussy footing around and address your subscribers. This recluse/deaf mute routine has gone on long enough; have you looked at the stock price lately? You are allegedly beholden to the people who buy the radios and pay for the service. You get paid a lot of money, and it is time for you to man up and do something. Anything, for Gods sake !!!
This isn’t just about radio anymore – this is about peoples lives. People are depending on you. Just a positive word from you would go a long way towards restoring at least a glimmer of hope.
If you have a conscience, you will act immediately and start putting up a fight like this companies life depends on it… because, quite frankly it does! Show us some passion, MEL. Get off the canvas and start punching. To just lie there and wait for the 10 count is unacceptable. You’ve got the support of millions of people behind you, the majority of whom DO NOT want satellite radio to sink like the Titanic.
When things get really bad, it calls for extreme measures. Anything less than your absolute best effort to save this company will forever taint your reputation and your legacy. Personally, I wouldn’t want to live with that hanging over me for the rest of my life. After all that you have accomplished, I have to believe that you wouldn’t either!
GS….
I am not averaging down. I have maintained a position in this equity for yaers. i sold a lot in 2004, and the remaining position has been pretty consistant since.
Does anyone know if any of the management and/or Board members are forgoing their bonuses?
Has there been any mention of the Board or management cutting back on their salaries?
Just wondering because we are paying them way too much for their p..s poor performance on our behalf.
Guys,
There are questions here about why sirius cant have debt. The simple answer is they can. They can have debt just as much as any other company but just like any other company when debt comes due you do one or two things.
One, You pay it. Two, You refinance it.
Lets be clear, Sirius is trying to refinance the debt they have but as we all know the credit market is pure garbage at this point. Thats what makes this issue more complex than it ever had to be. If we was in a credit market of even a year ago this wouldnt be a big deal. What does that leave if they cant refinance? It leaves the only other option and that is payment of debt. They have around 360 million in cash but that hardly touches the amount of debt they have to pay. Therefore you have concern from investors as to if the company can “survive” or not.
Two things we have going for us as investors is one, Nasdaq has allowed some breathing room for delisting. That will help us for a while. There is no concern for delisting near term.
The other thing is time. We know that they can cover the feb debt in one manner or another. The real questions are the may 09 and dec 09 debt. Can they cover those. We will just have to wait and see. My guess is they should be able to with any luck. Once this is covered the grass starts to get alot greener.
Sny..
So if the investors don’t think Sirius is a good investment now why would they think it was a better investment after the company has to dilute and do a RS in order to pay it’s debt and get its share price up to what appears to be a respectable amount. I would think WallStreet would still laugh at Sirius after that.
Or am I missing how Wallstreet works and that is that after the debt is paid for by killing the current shareholders who cares, the company is then attractive?
Thanks,
The spectrum has value. The current pps is to low imho.
It is to bad that the XM-Raytheon bid on the FAA contract was not accepted.If they could just find another customer for part of the spectrum that could bring in cash. What about Clear Channel?
That reminds me of the post I read where someone said jokingly, that Mel was an agent for the NAB sent to destroy Sat radio. That was a funny post.Makes you wonder for a second at the current share price though….could it be..? Naw..
The next two months as SoCalRun has pointed out will tell the story and I agree with that statement.
RS?,dilution?,loans approved?,loans not approved?,buy out?,forced buy out?, taken private?, BK?, partnership?, bail out? why not us too? and at least we know how much money we really need and what to do with it.
imho
vaporgold
Vapor.
I agree. PPS has to be to low.
That being said. Those in the know…….know.
Right now the trend is volume increases as prices decrease. That is a very very bad thing in your long.
Sirius seems to follow that pattern. We go lower the volume picks up like today.
Go figure.
We are on the Feb debt countdown. Markets appear to be saying, Mel’s statement that it will be in short order.
Is R/S + Dilution + Shareholder _________
I’m sure everyone can fill in the blank with their own word.
I meant R/S + Dilution = Shareholder _______.
r/s + dilution=shareholder takes it in the ASS w/o ky jelly…ouch you bastard MEL. But your turn is coming so bend over too.