SIRI Intraday Updates for the Week of 1/26/09

Look, y'all can spend every day 24 hours a day from here until the FEB debt is due arguing why the stock price is @ .11 and will never be able to figure out what the bottom line is.

Haven't they been diluting the damn stock ? You wouldn't expect it to increase in price if whenever it does "there comes the damn company with more shares..." would ya? Let me ask y'all something, have you ever diluted paint with water ? Did you notice how it dilutes just after adding water but then it starts thickening again over time and you have to come and add more water to it ? Same thing happens with this damn company and its stock.

You want the bottom line ?

Bottom line is Wall Street thinks they will not be able to re-finance the debt and they will declare BK. That is how the stock is priced...


ps: The shorts are all loaded in the stock (they are not shorting it anymore but are all loaded). Some may even wait until FEB to start unloading their short trades, if they ever do (They think BK is a real possibility).

Not to mention all the people that watch 4:3 pictures in 16:9 mode. Everyone looks like they belong in South Park :D

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Originally Posted by imromo24

I'll jump on board.

Just think HDTV. I've had HDTV for 6 years. Every, and i mean every, person i met that bought an early HDTV thought they were watching HDTV wasn't (5 families or so) Because you have to have Component or HDMI or DVI cables hooked up, you have to have an HD tuner, you have to have the TV set to 1080 or 720, you have to have the receiver set to output 720 or 1080, you have to acknowledge in the menu which input your using for the TV. Your satellite dish has to have 3lnbs. And finally I say...you have to pay your cable or satellite to send you the HD signal (unless you get it off the air which most people don't know either)

I could go on...the point is, If its not plug and play, people wont use it.

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Then there is the laziness factor which is what make Satellite Radio superior to Ipods, Slacker etal for use in the car. I get in my car, start the car and "First Wave" is there. I usually carry my phone with me but , even if my phone were capable, it would involve, opening an app, attaching the phone. An Ipod would require prep, such copying limited songs. A slacker would require a refresh. There is no substitue for Sat Radio in the car.

The problem is Sirius has, if not surrended the home market, largely ignored it. There should have been a cheap internet only device put out by Sirius. A Wi-Fi Conductor like device or a device like the Zing protype.

Siriusowner, you wrote:

ps: The shorts are all loaded in the stock (they are not shorting it anymore but are all loaded). Some may even wait until FEB to start unloading their short trades, if they ever do (They think BK is a real possibility).

Can you or anyone please explain that in layman's terms (i'm a lawyer, but not an experienced trader) - I know the shorts were a major problem in 2008, bringing the stock down, but am not sure exactly why or how.

Thanks

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Originally Posted by nisvan

Siriusowner, you wrote:

ps: The shorts are all loaded in the stock (they are not shorting it anymore but are all loaded). Some may even wait until FEB to start unloading their short trades, if they ever do (They think BK is a real possibility).

Can you or anyone please explain that in layman's terms (i'm a lawyer, but not an experienced trader) - I know the shorts were a major problem in 2008, bringing the stock down, but am not sure exactly why or how.

Thanks

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This dates back to the merger. In the traders word there's a rule: "Buy the seller, sell the buyer". What it means is, short the shares of the company that is buying and buy the shares of the one that is being acquired.

So, what happened was that a bunch of traders shorted the stock back then (and with Sirius paving the road with all those stupid agreements they made with GS you can imagine...). Now, tell me, has there been a reason in the last 7 months for them to cover ?

Quote:

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Originally Posted by nisvan

Siriusowner, you wrote:

ps: The shorts are all loaded in the stock (they are not shorting it anymore but are all loaded). Some may even wait until FEB to start unloading their short trades, if they ever do (They think BK is a real possibility).

Can you or anyone please explain that in layman's terms (i'm a lawyer, but not an experienced trader) - I know the shorts were a major problem in 2008, bringing the stock down, but am not sure exactly why or how.

Thanks

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Most of the shorts are major bond holders who have shorted the equity as an arbitrage play to lock in profits. In February when the remainder of the 2.5% converts are paid off, I would expect some or all of those hedged shorts to have covered their positions. Don't expect a short squeeze though - My guess is that some of these debt for equity swaps are being used by the big boys to cover their position without having to buy shares in the open market.

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Originally Posted by winagain35

Most of the shorts are major bond holders who have shorted the equity as an arbitrage play to lock in profits. In February when the remainder of the 2.5% converts are paid off, I would expect some or all of those hedged shorts to have covered their positions. Don't expect a short squeeze though - My guess is that some of these debt for equity swaps are being used by the big boys to cover their position without having to buy shares in the open market.

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"I do not why GS comes to mind... Wait a minute I know why...
Of course... they are holding all those convertibles ! I knew it... " Guess who's short and who has the money to manipulate a penny issue ?

You are correct, there will be a squeeze alright... but not the size the people is waiting for in this forum...

However, no one is shorting the issue anymore, it has been shorted all the way up to the neck and the shorts remain short, they are not covering...just yet...and big boys like GS may never cover...this is why there won't be a big squeeze.

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Originally Posted by Siriusowner

"I do not why GS comes to mind... Wait a minute I know why...
Of course... they are holding all those convertibles ! I knew it... " Guess who's short and who has the money to manipulate a penny issue ?

You are correct, there will be a squeeze alright... but not the size the people is waiting for in this forum...

However, no one is shorting the issue anymore, it has been shorted all the way up to the neck and the shorts remain short, they are not covering...just yet...and big boys like GS may never cover...this is why there won't be a big squeeze.

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You're kind of missing my point. My theory is that GS and the other Bond bullies won't HAVE to cover on the open market since the shares they're getting in exchange for a portion of the debt will more than account for their hedged positions. I'd guess that most of the February hedges have probably already covered that way(for a HUGE profit)... it's the December convert holders and the 2014 convert holders that account for most of the 200mil plus short positions.
Remember Goldman doesn't necessarily WANT to see BK... they may end up owning a hefty position in the company after February. Sirius and GS could well be bedfellows soon.

http://i.gizmodo.com/5142096/sirius-...-within-a-week

Sirius Satellite Radio iPhone App Could Come Within a Week
By Sean Fallon, 3:20 PM on Thu Jan 29 2009

"Sources close to Orbitcast have revealed that Sirus is finally submitting their uSirius StarPlayr to the App Store this weekend."

http://www.crunchgear.com/2009/01/29...n-your-iphone/

StarPlayr: You’ll soon be able to listen to Sirius XM on your iPhone
by Nicholas Deleon on January 29, 2009

"...........it will be submitted to Apple for approval by January 31. Considering there’s no “boobs and booty” here, I can’t see the approval process lasting too long. It’s up to Apple."

SIRI closed red @ .1137 with the market bloody red....

I really had no idea what was going to happen today.....

Looking at a 5 day chart - SIRI is still in it's uptrend...

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Originally Posted by winagain35

You're kind of missing my point. My theory is that GS and the other Bond bullies won't HAVE to cover on the open market since the shares they're getting in exchange for a portion of the debt will more than account for their hedged positions. I'd guess that most of the February hedges have probably already covered that way(for a HUGE profit)... it's the December convert holders and the 2014 convert holders that account for most of the 200mil plus short positions.
Remember Goldman doesn't necessarily WANT to see BK... they may end up owning a hefty position in the company after February. Sirius and GS could well be bedfellows soon.

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You have to keep in mind, Bonds come with options. We do not know what options GS got when they bought those convertibles.

I do not think the Dec and the 2014 convert holder account for the majority of the short positions now. They will be after FEB. But then again, if they will be, what is the use of holding this issue in the long term ? no dividens and most likely no appreciation.

well we had a pullback which is reasonable, hopefully thats all it was and we can resume going up tommorow.

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Originally Posted by Siriusowner

You have to keep in mind, Bonds come with options. We do not know what options GS got when they bought those convertibles.

I do not think the Dec and the 2014 convert holder account for the majority of the short positions now. They will be after FEB. But then again, if they will be, what is the use of holding this issue in the long term ? no dividens and most likely no appreciation.

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Umm... wrong. Some bonds are just bonds... some have warrants, which are like options and some are convertible - meaning that the bonds convert to shares at a certain strike price.

The 2.5% convertible bonds due in February have a conversion strike price of $4.51. We're not going to hit that obviously, so the bonds will have to be paid in cash... OR exchanged for equity if the holders agree to that.

The holders of convertible bonds almost always short the common stock as an arbitrage play... so considering that there are only $175 million left in February, compared to the $350 million in converts due in December and $550 million in converts due in 2014, I think it''s pretty easy to deduce where the majority of the hedgy shorts are.

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Originally Posted by Siriusowner

You have to keep in mind, Bonds come with options. We do not know what options GS got when they bought those convertibles.

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Siriusowner,

What are you talking about? Are you talking about the "embedded options" that are inherent in the bonds already or warrants? What are you talking about? Bonds come with embedded options...

Embedded options

A callable bond allows the issuer to buy back the bond at a predetermined price at certain time in future. The holder of such a bond has, in effect, sold a call option to the issuer. Callable bonds cannot be called for the first few years of their life. This period is known as the lock out period.

A puttable bond allows the holder to demand early redemption at a predetermined price at certain time in future. The holder of such a bond has, in effect, purchased a put option on the bond.

A convertible bond allows the holder to demand conversion of bonds into the stock of the issuer at a predetermined price at certain time period in future.

An exchangeable bond allows the holder to demand conversion of bonds into the stock of a different company, usually a public subsidiary of the issuer, at a predetermined price at certain time period in future.

Sirius XM Radio Inc.
Jan. 29, 2009 Market Close: $ 0.1137

After Hours Trade Reporting
After Hours
Last: $ .115
After Hours
High: $ .118
After Hours
Volume: 60,184
After Hours
Low: $ .1136
After Hours
Time (ET) After Hours
Price After Hours
Share Volume
17:32 $ .115 100
17:32 $ .1136 100
17:24 $ .1175 500
16:42 $ .1175 668
16:37 $ .1175 1,032
16:29 $ .1175 405
16:22 $ .118 500
16:08 $ .114 400
16:08 $ .114 7,100
16:07 $ .118 200
16:02 $ .115 47,479
16:02 $ .1136 1,700

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Originally Posted by winagain35

Umm... wrong. Some bonds are just bonds... some have warrants, which are like options and some are convertible - meaning that the bonds convert to shares at a certain strike price.

The 2.5% convertible bonds due in February have a conversion strike price of $4.51. We're not going to hit that obviously, so the bonds will have to be paid in cash... OR exchanged for equity if the holders agree to that.

The holders of convertible bonds almost always short the common stock as an arbitrage play... so considering that there are only $175 million left in February, compared to the $350 million in converts due in December and $550 million in converts due in 2014, I think it''s pretty easy to deduce where the majority of the hedgy shorts are.

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No I am not.

To begin with, the conversion price is called the parity price not the strike price.

Often a convertible bond will carry a stipulation that it can be called if the stock appreciates significantly.

If a company is doing well and the indenture provides that the bonds are callable, you can be sure that a call will happen if the stock dividends are less than the interest payments on the bonds. DEPENDING ON THE PRICE YOU PAID FOR THE BONDS, YOU MAY SUFFER A LOSS AS WELL AS MISS AN OPPORTUNITY FOR A BIG UPSIDE.

In addition, in the event of a BK convertibles have senior status over preferred and common stock.

This is primarily an institutional market populated by funds managers and insurance companies... not by you or me.

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Originally Posted by Demian

Siriusowner,

What are you talking about? Are you talking about the "embedded options" that are inherent in the bonds already or warrants? What are you talking about? Bonds come with embedded options...

Embedded options

A callable bond allows the issuer to buy back the bond at a predetermined price at certain time in future. The holder of such a bond has, in effect, sold a call option to the issuer. Callable bonds cannot be called for the first few years of their life. This period is known as the lock out period.

A puttable bond allows the holder to demand early redemption at a predetermined price at certain time in future. The holder of such a bond has, in effect, purchased a put option on the bond.

A convertible bond allows the holder to demand conversion of bonds into the stock of the issuer at a predetermined price at certain time period in future.

An exchangeable bond allows the holder to demand conversion of bonds into the stock of a different company, usually a public subsidiary of the issuer, at a predetermined price at certain time period in future.

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None of those. Well close to the call option but not exactly. Read the post above.

Quote:

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Originally Posted by Siriusowner

No I am not.

To begin with, the conversion price is called the parity price not the strike price.

Often a convertible bond will carry a stipulation that it can be called if the stock appreciates significantly.

If a company is doing well and the indenture provides that the bonds are callable, you can be sure that a call will happen if the stock dividends are less than the interest payments on the bonds. DEPENDING ON THE PRICE YOU PAID FOR THE BONDS, YOU MAY SUFFER A LOSS AS WELL AS MISS AN OPPORTUNITY FOR A BIG UPSIDE.

In addition, in the event of a BK convertibles have senior status over preferred and common stock.

This is primarily an institutional market populated by funds managers and insurance companies... not by you or me.

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Siriusowner,
I know you like to argue - and some of your back and for with demian is amusing. But in this case you're still missing the point. The crux of my post was A: We DO know the conversion price for the 2.5% bonds(you said we didn't) and B: The majority of the short interest in Sirius is held by the holders of the December convertibles and the 2014 convertibles. Remember back in August, Mel loaned a bunch of shares to MS and UBS to provide a short hedge against those converts because SIRI was on the Reg Sho list and there were no more shares to short.

Quote:

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Originally Posted by winagain35

Siriusowner,
I know you like to argue - and some of your back and for with demian is amusing. But in this case you're still missing the point. The crux of my post was A: We DO know the conversion price for the 2.5% bonds(you said we didn't) and B: The majority of the short interest in Sirius is held by the holders of the December convertibles and the 2014 convertibles. Remember back in August, Mel loaned a bunch of shares to MS and UBS to provide a short hedge against those converts because SIRI was on the Reg Sho list and there were no more shares to short.

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This is why argue with Demian. I never said you did not know the parity (conversion or strike for you) price. Re-read the posts.

I understand MS and UBS having the advantage of hedging but GS is next in line not them. MS and UBS will short those shares IF the price starts coming up after FEB.