SIRI Monthly Thread December 2014

Basically Midas, what I see with Sirius the last year or 2 is similar to what I saw in cable stocks 3 or 4 years ago when they were trading at 5 times cash flow. A scared investment community thinking cable was going to die from cord cutting and programming costs. What Wall Street did not see back then was cable will make much more money from broadband as content moves to the internet from TV as EBITDA margins are much higher in broadband. So cord cutting WORKS in cable's favor believe it or not. Now cable is trading at 7 or 8 times EBITDA as broadband grows and I expect it to go to 12 times within a few years. Broadband Growth is enormous for cable.

Now Sirius has a bunch of scared investors on Wall Street who think internet music streaming is going to take over the car and destroy Sirius. Nothing could be further than the truth. The connected car will help Sirius broaden its offerings in the car - On Demand, customization etc, plus give it a new growing cash flow business with Agero being similar to GM's OnStar. And Pandora, Spotify, Beats, Slacker and the rest of the endless streamers will replace iTunes downloads which replaced CD's which replaced tape decks in the car.

Scared investors create opportunity. 20 times my projected FCF per share in 2016 equal $6 by the end of 2016. I think Meyer can accomplish it.

I notice you don't really mention Apple iTunes Radio. I know it's not a big competitor/concern right now but you don't see them being a big player in the future? Apple is printing a lot of money these days and it does concern me they have their eyes set on the car from a SIRI investment stand point. I do see a huge opportunity for Sirius to stream ALL their content to the vehicle. Why doesn't Google or Apple take out Sirius XM just for access to the content alone? Is it the cost of maintaining and launching new satellites? What am I missing?

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Originally Posted by MUSCLE13

Basically Midas, what I see with Sirius the last year or 2 is similar to what I saw in cable stocks 3 or 4 years ago when they were trading at 5 times cash flow. A scared investment community thinking cable was going to die from cord cutting and programming costs. What Wall Street did not see back then was cable will make much more money from broadband as content moves to the internet from TV as EBITDA margins are much higher in broadband. So cord cutting WORKS in cable's favor believe it or not. Now cable is trading at 7 or 8 times EBITDA as broadband grows and I expect it to go to 12 times within a few years. Broadband Growth is enormous for cable.

Now Sirius has a bunch of scared investors on Wall Street who think internet music streaming is going to take over the car and destroy Sirius. Nothing could be further than the truth. The connected car will help Sirius broaden its offerings in the car - On Demand, customization etc, plus give it a new growing cash flow business with Agero being similar to GM's OnStar. And Pandora, Spotify, Beats, Slacker and the rest of the endless streamers will replace iTunes downloads which replaced CD's which replaced tape decks in the car.

Scared investors create opportunity. 20 times my projected FCF per share in 2016 equal $6 by the end of 2016. I think Meyer can accomplish it.

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Originally Posted by MUSCLE13

Basically Midas, what I see with Sirius the last year or 2 is similar to what I saw in cable stocks 3 or 4 years ago when they were trading at 5 times cash flow. A scared investment community thinking cable was going to die from cord cutting and programming costs. What Wall Street did not see back then was cable will make much more money from broadband as content moves to the internet from TV as EBITDA margins are much higher in broadband. So cord cutting WORKS in cable's favor believe it or not. Now cable is trading at 7 or 8 times EBITDA as broadband grows and I expect it to go to 12 times within a few years. Broadband Growth is enormous for cable.

Now Sirius has a bunch of scared investors on Wall Street who think internet music streaming is going to take over the car and destroy Sirius. Nothing could be further than the truth. The connected car will help Sirius broaden its offerings in the car - On Demand, customization etc, plus give it a new growing cash flow business with Agero being similar to GM's OnStar. And Pandora, Spotify, Beats, Slacker and the rest of the endless streamers will replace iTunes downloads which replaced CD's which replaced tape decks in the car.

Scared investors create opportunity. 20 times my projected FCF per share in 2016 equal $6 by the end of 2016. I think Meyer can accomplish it.

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Look Midas there are not that many people who truly understand media business models. Mel was one of the elite. So is Malone. Mel rode advertising to make investors rich in Infinity Broadcasting, Westwood One, CBS, Viacom in the 90s. The advertising model got weaker when the internet created so much supply. So Mel switched tactics to ride the subscription model with Sirius. That also happens to be how Malone made investors rich by building the largest cable company in the 90s in TCI. So that's where the model is now. If you pay attention to the these media geniuses it's subscription all the way now. Ain't rocket science. Business models matter.

Why do you think I like cable and sat radio? Business models matter. Mel said it a million times.

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Originally Posted by midas360

I notice you don't really mention Apple iTunes Radio. I know it's not a big competitor/concern right now but you don't see them being a big player in the future? Apple is printing a lot of money these days and it does concern me they have their eyes set on the car from a SIRI investment stand point. I do see a huge opportunity for Sirius to stream ALL their content to the vehicle. Why doesn't Google or Apple take out Sirius XM just for access to the content alone? Is it the cost of maintaining and launching new satellites? What am I missing?

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What you are missing is internet music streaming is a bad business model and it's replacing music downloads NOT radio. And it doesn't make money! Who cares whether Google or Apple should want Sirius or not? Malone controls it. And it has an awesome business model. Free Cash Flow machine. That's what I care about.

Why didn't Google or Apple buy movie studios or TV networks or cable companies? Do I care? Let them do whatever they want. I care about Free Cash Flow, EBITDA, Content and Distribution. I am a media investor.

Oh I agree with what you are saying. I just worry about companies like Apple and Google with deep pockets changing the industry. You are right though. They have been very successful to date for sure.

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Originally Posted by MUSCLE13

Look Midas there are not that many people who truly understand media business models. Mel was one of the elite. So is Malone. Mel rode advertising to make investors rich in Infinity Broadcasting, Westwood One, CBS, Viacom in the 90s. The advertising model got weaker when the internet created so much supply. So Mel switched tactics to ride the subscription model with Sirius. That also happens to be how Malone made investors rich by building the largest cable company in the 90s in TCI. So that's where the model is now. If you pay attention to the these media geniuses it's subscription all the way now. Ain't rocket science. Business models matter.

Why do you think I like cable and sat radio? Business models matter. Mel said it a million times.

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Originally Posted by denco1

Jimmy Iovine appointed to BOD of Live Nation.....LMCA/K owns a large stake in SIRI and Live Nation. SIRI and Live Nation and Jimmy Iovine/AAPL/Beats by Dre..........they are all having one BIGFNGORGY

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Interesting find Denco. From what i have read there have been some rumors that beats steaming may be put on the back burner or even slated to be discontinued all together. its been reported that the beats app is not even preloaded on the newer iphones.

http://www.todaysiphone.com/2014/09/...ntinued-apple/

http://www.myrateplan.com/blog/beats...inued-by-apple

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Originally Posted by midas360

Oh I agree with what you are saying. I just worry about companies like Apple and Google with deep pockets changing the industry. You are right though. They have been very successful to date for sure.

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They could change any industry they want - So don't invest in anything :) Do I worry about that? Hypotheticals don't mean squat in investing. When the media models change that's when to worry. Look at what happened to terrestrial radio. The ad model just sucks now. It isn't growing. Infinity Broadcasting and Clear Channel made investors rich in the 90s. No more. Follow the business models.

Again. Thanks muscle! Didn't mean to leave you hanging. I had to go somewhere. I appreciate your insight!!

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Originally Posted by Faulkner_SA

Midas why are you suddenly playing as if you are interested in SIRI? This is funny stuff!

Would you suggest that those you urged to sell at $3.16 to build cash for $2.70 now re-buy here at $3.60? You seem confused as to why people are not rushing to buy based on one month of good auto sales?

Too funny!

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its his fake...If ya cant beat em..join em strategy. A short in long clothing now. it is funny.

Anyone who has followed SIRI knows very well that a single month of auto sales don't really mean anything so I'm not buying the "hmmm I wonder why it's not up?!?! great auto sales!!!" nonsense :P Have had months of them and not a peep until now ;)

If one is looking for $2.70 then one would not be puzzled at all as to why it was not suddenly shooting skyward on a single month of auto sales data from $3.60 (a clear resistance area, 3x tops now this year). Someone who tries to run a trading chat should also understand chart based resistance points, trend channels, etc...

Or maybe he doesn't? I dunno. Maybe 1 month of auto sales data changes him from sell at $3.16 one month to buy at $3.60 the next? Sounds friggin' dangerous to me! Time to hop into that Pontiac Solstice and head to the drug store for some medication I think :P