SiriusXM Weekly Stock Thread for 3-1-10
Every so often I read a post at another site that deserves repeating . . . such is the case with a classic Relmor rant appearing at the KOAT site on 2-28-10. This Relmor-Rant is a classic three-parter and is a good history lesson for those who bought-in after the Liberty rescue.
Whether you agree with him or not, you must respect the fact that Relmor calls it the way he sees it . . . there is no sugar-coating here and a little rough language . . . the link is provided at the end of Part 3
Here is Part 1:
Relmor responding to the speculation of Siri buying-back the Preferred Shares from Liberty:
Its not happening. There is no way Sirius would convince Liberty to do that. Its a pipe dream. When you steal 400 dollars in value, for instance, you wouldnt sell it back for 100 dollars. Sure you made a 100, but you lost 300 dollars. So if Sirius XM wants to receive the percentage of the company back,they would have pay even now future value, forget current value. No asset sirius xm has, other than more ownership, ironically, to sell anyone. In the future they could be selling leased band width, possible lease or sell content, or some type of distrubution deal, but usually people or companies dont pay for services with ownership. Thats what Sirius did to get to this point. They basically whored themselves out, ownership wise, to get money to move forward. It almost worked. Almost.
FCC and the economy sealed the deal on that. Banks too. Dont blame Ergin, or any other fantasy theory from Mel or anyone else.
If Sirius could have gotten out of 2009 with full ownership, they would never have needed to whore itself out again. They couldnt do it however, as Sirius XM as a privately owned company, in media, with a huge future, just has way too many enemies, with the siutation 2009 presented. It was a no brainer for the cocksukcing banks and their insidious agents of evil to play this how it did. The reward was complete control of Sirius XM.
"Luckily", say that dripping with sarcasm, Liberty stepped in and removed that option of 100 percent take over, so ya, i guess you can say we should be somewhat greatful, we are still in the game. This is not a rant against LIberty, however, so I continue...
The key to making sirius obtain new money, was the May bank debt, period. Feb was solvable, if May was extended. Then you till Dec. to get a real loan, like they did, twice in 2009. Yes the banks caused this 100 percent. Look at what a killng they made on this whole deal from the merger on. Plus they got all their cash due in 2009 fro Sirius XM.
I want someone to tell me, if feb was removed, and the bank debt extended, Sirius would not have been about to qualify for money to remove Dec bonds, if COH wasnt enough. Or that a realistic equity price could have been reached for a debt for equity swap at that point. Some of the December debt due would definately have been able to be removed with some shares for sure.
Ergin couldnt gain any control over the largest debt due in 2009, the bank debt, the banks REFUSED to extend.
5% premarket does not bode well when you have a itchy trigger finger.
Relmor rant pretty interesting, same bs I have been saying since I also know when someone is pulling my chain. Two years ago, Mel knew the deal and the pain coming and he walked us to the wood shed, 1.60ish a share, I personally rode all of the bs info into the flames.
Whats the scoop today? I am taking a beating on all of my positions, SIRI, FAZ, FXP. I saw China did pretty well overnight, banks leading, this always causes pain for FXP, should be a nice entry point.
Good luck
Big Ben
Barrington’s Jim Goss Raises Sirius XM (SIRI) Price Target
Jim Goss, Barrington Research Associates
In a research note issued on the heels of Sirius XM’s (Nasdaq: SIRI) Q4 earnings report, Jim Goss of Barrington Research remains bullish on the Satellite Radio provider. Maintaining his OUTPERFORM rating on shares of Sirius XM, the analyst upgraded his target price from $1.10 to $1.25, citing “positive developments that include greater recognition of its improving fundamentals on the part of both equity and fixed income observers.”
In the report, Mr. Goss discusses Sirius XM’s Q4 and full year metrics, noting that the reported results “largely met or exceeded expectations.” He points to the reported full-year 2009 adjusted EBITDA of $463 million as being important and “above management’s guidance and topping our adjusted and above-range estimate of $449 million.” Mr. Goss is now forecasting $620 million in EBITDA for 2010, which is above Sirius XM management’s guidance of $550 million. The analyst is projecting 19.3 million subscribers for year-end 2010, using an ARPU assumption of $10.73 and a SAC assumption of $63.
While noting that the company had pre-announced Q4 subscribers of 257,028 as well as the conversion rate of promotional customers, Mr, Goss saw more color being provided in the earnings release and during the conference call. While Sirius XM’s 18.8 million subscriber count is shy of the over 19 million subscribers the company had in 2008, Goss says that “the momentum seems to have decidedly shifted in Sirius’ favor, due primarily to improvements in the outlook for the auto sector.” Mr. Goss explains, “The average SAAR for auto sales in the fourth quarter was 10.9 million, according to AutoData. Management stated on the call that they feel that the level of auto sales in the fourth quarter is sustainable for the upcoming year.” While he notes that this not comparable to OEM sales during the middle of the last decade, he says that it is a “welcome improvement” compared to earlier last year. Goss sees penetration rates continuing to improve in 2010, projecting a 60-62% range.
Mr. Goss discussed CEO Mel Karmazin’s comments during the conference call. “CEO Mel Karmazin was emphatic in indicating that a reverse stock split is essentially off-the-table…”, says Goss. He also noted management’s citing of statistics which show that Sirius XM in monetizing it’s subscriber base more effectively than terrestrial and internet radio. While Mr. Goss says that SIRI “has continuing upside and should be able to create financial metrics that should continue to support the stock”, he also noted that “it would be unrealistic to think in terms of a repeat of the type of catch up phase of stock performance that the stock has been able to achieve over the past year.”
