Sirius Weekly Thread Week 9-08.09

[JohnnyIrishXM]

Good points John and Johnny......
I do wonder if the sats are usable by DTV though. Not sure about that. Anyone have a solid fact on that one? It's an important issue. If they are, that opens up a lot of very positive possibilities.
Anyone with a lot of dry powder today should be able to snap up some shares as this delisting BS is going to pressure the SP most likely.

Underway,good catch,meant to say DTV and Dish could use sats for radio if offered to buy out sxm.,meant they are not paper nonsense..

[JohnnyIrishXM]

JohnnyIrishXM, while I agree with most, I think while you will most likely see sub growth in the 3rd quarter you will also see a major hit to FCF. Thats ok though because in the 4th quarter, they may only get few subs they will also have a huge and I think it will be a huge FCF number. Next I dont think you explained EBITDA well enough and where this company stands so far. So as most know it is profit not including intrest and basically stock options, sense that it most of the remaining cost left unaccounted for. As you say and I will use your number of 320 million in interest we take what SIRIXM is at so far and that number is about 240 million in EBITDA. Now while I believe they will take a hit to EBITDA in the 3rd quarter the 4th quarter will also make up for any short coming in the 3rd quarter. So basically looking at it from a common sense view point SIRIXM has 2 quarters to make half of what they have made in the last 2 quarters to be profitable with interest included. Now there is the stock that was given and it is a expense but one that effects the PPS (dilution) more then cash on hand. So the question that is left is who here thinks that SIRIXM wont make half of what they made in the first 2 quarters when the first 2 quarters are usually the worst of the 4 when added up by twos and averaged out. What that means is historically for this company 3rd is worse the 2nd and the 4th is better then all of them. So when you add the 1st and 2nd quarters up and average them both and then do the same for the 3rd and 4th, The last 2 quarters combined tend to be way better then the first 2 quarters.


P.S. I think it wise to remeber though when I say historically that means watch out if there are extra charges that are not normally there in the 3rd or 4th quarter. That happen with merger cost in the last 4th quarter which is what caused them to take a hit to their FCF number. Satellite cost hit XMSR in the 4th quarter of 2007 and caused them to have a poor FCF number, while at the same time SIRI was FCF positive for the last half of the year.

Thanks john,for adding that in asnd it is an important point about EBITDA and 3 and 4Q's compared to 1 and 2Q's...was averaging out FCF for both Q's.
Understand your point about rev up in sac and cost's but i checked report and they have 5 mil in inventory of radios sitting there at end of 2Q already,that is alot of radio's,i'm sure it is from ramp down,so 3Q might not see as big an increase as previous 3Q's but maybe evened out between both Q's till end of year..,now not sure how new retail radio's are accounted for and expecting 4Q and next year to dramatically change recent history of retail channel llosing 300k subs every q lately..

[john]

Except under the possible scenario that sat radio becomes an unattractive investment, in other words, the biz model falls flat in the face of competition from other mediums (internet, etc). While I don't believe that will happen, it does affect the value one places on the satellites if in fact they are ONLY usable for radio. If S-XM were to fail, no one is buying those satellites to start up another sat radio biz. On the other hand, should they have value to DTV or Echostar, that's another story.

underway, I have said as much myself, before. That fact is though (and doctorex finally made a good post) if someone was in the market to buy SIRIXM then they are in the market to be buying satellite radio. The value in satellite radio is the millions of subs they have.

[john]

Thanks john,for adding that in asnd it is an important point about EBITDA and 3 and 4Q's compared to 1 and 2Q's...was averaging out FCF for both Q's.
Understand your point about rev up in sac and cost's but i checked report and they have 5 mil in inventory of radios sitting there at end of 2Q already,that is alot of radio's,i'm sure it is from ramp down,so 3Q might not see as big an increase as previous 3Q's but maybe evened out between both Q's till end of year..,now not sure how new retail radio's are accounted for and expecting 4Q and next year to dramatically change recent history of retail channel llosing 300k subs every q lately..

I see your point about the 5 million radios but I have to ask, what is there normal inventory. Much of the 3rd quarter cost come in retail also because that is when they put out most of their new models to get ready for the Christmas holiday. There is a reason that historically the 4th quarter has been mainly a retail quarter and not a OEM quarter.

[candleman]

Nice and steady trading today on average volume. It doesn't seem like many buyers or sellers have been reading Big Ben's posts. I think today may be a good time to add to the position.

[imromo24]

remember the 3 day rule, 3 days to digest news and start the moves...id expect tuesday to be the day siri heads down on the news...

[Siriusowner]

remember the 3 day rule, 3 days to digest news and start the moves...id expect tuesday to be the day siri heads down on the news...

3 day rule ? where does that come from ?

[candleman]

3 day rule ? where does that come from ?

I was wondering the same thing myself..... I've heard of the three sneeze rule

And this is such old news, I can't imagine it taking that long for it to sink in.

[candleman]

This was a great week to be a SIRI owner. Up almost 3 cents on the week. Not bad considering the delisting notice and all of the bad press.

[doctorex]

doctorex will explain the importance of a stock split with an analogy.

a forward split, big shares into little shares, is exactly like this: you go to the bank, and you give the teller a $100 bill, and she gives you 2 $50 bills in exchange.

a reverse stock split (little shares into big shares) is exactly like this: you got to the bank, take 5 10-dollar bills, give them to the teller, and she gives you one 50-dollar bill.

but, you may ask, that means the stock split, forward or backward, has no importance whatsoever. this is correct. the split has no importance whatsoever. the dividends are adjusted for it, the books and records are adjusted for it, the shareholders votes are adjusted for it, and the stock price is adjusted for it too, and so on in every conceivable way.

STOCK SPLITS, FORWARD OR BACKWARD, HAVE NO IMPORTANCE WHATSOEVER. FIND SOMETHING ELSE TO WORRY ABOUT.

like the doctorex puzzle, for example. what is the word sirius stockholders are forbidden to say, written in plus one code?

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