S&P 2009 price Target

[Siriusowner]

Our 12-month target price of $0.50 is based on
relative enterprise value to projected 2009 revenues.

Morningstar has the same target price.

They still have a buy recommendation as of 12/05/2008.

I wouldn't buy the debt: S&P Credit Rating CCC+

And this why the stock price has stayed depressed:

In early November, SIRI unveiled its most detailed
post-merger financial targets yet. While
implying a near-term deceleration in subscriber
growth, we think the long-term guidance
(including revenue and free cash flow projections
through 2013) enhances visibility, and
bodes relatively well for ongoing integration of
the combined company. Meanwhile, after what
we saw as mixed third quarter results, culminating
in a $5 billion goodwill impairment
charge, management offered a much-needed, if
inconclusive, outlook on what we view as critical
refinancing of debt due in 2009.

"Mixed results and inconclusive outlook...", they really need to hit one out of the ballpark @ the 12/18 meeting or at least post better than expected results next quarter.

Source: S&P stock report dated 12/05/2008.

What do you all think about the price target, fair or unfair ? Why ?

[winagain35]

I think .50 is a fair projection for 09. That's almost a four-bagger from where we're trading now! That said, if the debt gets taken care of in a favorable way and the auto industry picks up quicker than expected, then I say we go higher. But, those are some pretty sizeable IFs. Of course if we DO remain at .50 or less through next summer then we'll be looking at the reverse split. If we're at .50 or a bit higher, then perhaps only a 10 for 1 will be necessary.

[trippingthespeculatingpos]

it seems to me whoever those people who are selling siri at 15 cents, most likely hedge funds, seem to be happy to sell at 15 cause everytime it hits 16 they bring the ask price right back down, i swear if has momentum to go up but the sellers wont raise
raise there damn ask price. im thinking hedge funds.

[Newman]

0.50 is a an unfair price. The February and the May debt does not really worry me, it is the December debt that bothers me. Unless the credit markets make a serious U-turn (which by Dec. 09, I think they will), it may be difficult for Sirius to find the financing. That end of the year uncertainty will likely weigh on the stock price. The problem is, the debt is due December 1st, which means if it is resolved, it will be done in November, and the stock price will soar going into the end of 2009. If they are not unable to resolve that debt, then it will be much lower than 0.50...

[Siriusowner]

0.50 is a an unfair price. The February and the May debt does not really worry me, it is the December debt that bothers me. Unless the credit markets make a serious U-turn (which by Dec. 09, I think they will), it may be difficult for Sirius to find the financing. That end of the year uncertainty will likely weigh on the stock price. The problem is, the debt is due December 1st, which means if it is resolved, it will be done in November, and the stock price will soar going into the end of 2009. If they are not unable to resolve that debt, then it will be much lower than 0.50...

I am sure that if the resolve the first two then the third one will be easier, don't you think ? Why then are you so worried about it ?

By the time the 3rd one is due, they will either have their heads above water or will have drowned... besides, as they resolved these debts, more options will open to them and I am sure their credit rating will improve so they can easly sell more debt into the market... and get in trouble again, isn't that what they did ?

[Newman]

They have not issued hardly any new debt in quite a while... The only new debt they have raised was a result of the XM bond offering, where they were trying to raise 500 million, and actually were able to raise about 800. That is the only "new" debt they have, as far as I can recall.

My concern is that they have cash on hand to pay off the Feb. debt, and the May debts can easily be extended or paid off with cash. The December debt, however, they will not have cash on hand to pay off with. Next year they will not have their heads above water, they will have it at the surface, but hardly above.

It is also about the terms they get their financing at... if they are able to get the Feb debt financed instead of paying it off in cash, they may have enough cash to pay most of the Dec. debt off in cash. I just don't think they will get good terms on the Feb debt, and will end up paying most of it off in cash, putting them in a pinch for December.

[Siriusowner]

They have not issued hardly any new debt in quite a while... The only new debt they have raised was a result of the XM bond offering, where they were trying to raise 500 million, and actually were able to raise about 800. That is the only "new" debt they have, as far as I can recall.

My concern is that they have cash on hand to pay off the Feb. debt, and the May debts can easily be extended or paid off with cash. The December debt, however, they will not have cash on hand to pay off with. Next year they will not have their heads above water, they will have it at the surface, but hardly above.

It is also about the terms they get their financing at... if they are able to get the Feb debt financed instead of paying it off in cash, they may have enough cash to pay most of the Dec. debt off in cash. I just don't think they will get good terms on the Feb debt, and will end up paying most of it off in cash, putting them in a pinch for December.

They need to prioritize. Fist things first, once they prove that they can pay or refinance the FEB debt and the MAY debt, the DEC debt will be easier to juggle... more if they meet and/or beat EPS expectations during the year... which we are confident they will do right ?

Anyway, I am not concerned about the DEC debt... ultimately, they may not get to it if they can not prove they can get their heads at the surface or above water in 2009.

[Lefty2Gunz]

it seems to me whoever those people who are selling siri at 15 cents, most likely hedge funds, seem to be happy to sell at 15 cause everytime it hits 16 they bring the ask price right back down, i swear if has momentum to go up but the sellers wont raise
raise there damn ask price. im thinking hedge funds.

Ya I've been noticing the same thing and its pissing me off. the ask price is constantly even with the market price or even lower. It's never higher. If they want to keep the price low then their doing a damn good job at it

[trippingthespeculatingpos]

maybe its all the shorters who are doing it, maybe its a sign that the shorts are leaving, would be nice. is it just me or is volume really low today? is that a good or bad asign on a sorta flat day?

[Lefty2Gunz]

maybe its all the shorters who are doing it, maybe its a sign that the shorts are leaving, would be nice. is it just me or is volume really low today? is that a good or bad asign on a sorta flat day?

ya its way too low, it was low yesterday too