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  1. frigginsirius is offline
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    Joined: Oct 2008 Posts: 29
    10-23-2008, 11:30 AM #1

    CASHING out NOW better for LONGs than a RS!!!

    I am shocked. I may actually cash out now at 27 cents! As a LONG this blows my mind since I swore I'd never sell.

    But with the VERY real reality of a 1 for 50 reverse split looming....I figured out on paper...that even SELLING NOW would be better than waiting.

    If I cashed out now at 27 cents, my 10,000 shares would get me $2700. WHICH TOTALLY SUCKS since my initial investment in Sirius was around $30,000!!!! (Alot for an artist like me).

    NOW....if a 1 for 50 RS happens, I'll have only 200 shares!! At roughly $13 a share as it stands now.

    BUT...then the shorts would descend and rip that SP to pieces! Thats WHAT they are waiting for! ANYONE...BRANDON & TYLER included who think otherwise are INSANE. I'm sorry. But have they not LIVED thru the last 3 years??? The shorts have bashed this stock down to where they have hit bottom. A RS would be a shorts WET DREAM. It'd be like throwing red meat into a tank full of hungry piranha fish.

    Anyway, that $13 share price would be cut down to $5 almost overnight.

    My 200 shares at $5 would net me a mere $1,000.

    Worse....Sirius would probably be beaten all the way back down to a $1 which would net me a whopping $200 if I cashed out.

    And lets not even GO below a dollar now...which in this economy I could see happening.

    This move would be SURE DEATH for ALL LONGS who bought in at $6. Even if they've averaged down like I have....MOST were only able to lower their Average PPS to around $2.50 or so.

    If this 1 for 50 reverse split happens and then the shorts knock us DOWN again(which I assure you they will)....then it'd take Sirius moving to over $150 for many of us JUST TO BREAK EVEN!!!!!!

    Where as now $2.50 would bail ALOT of us out. Plus at least there is a hope without the RS of a company buying us out and helping us REACH that break even point or close to it. this point $1.50 buyout would get me closer to Break Even then a RS EVER WILL.

    So when I hear Brandon and Tyler saying their greatest FEAR is a BUYOUT at these levels....and YET they say a 1 for 50 REVERSE SPLIT IS GOOD, I have to think they either don't own alot of shares or have LOST their minds!

    I have laid out what a Reverse Split will do to LONGS like me....and when compared to a BUYOUT at even $1.50....its a NO BRAINER.

    ALL LONGS should be AGAINST the RS if they ever want to make their money back. HELL...cashing out now at 27 cents would give us MORE then what we will ultimately get in a 1 for 50 reverse split and the SHORT aftermath that would be to follow.

    So WHY on earth would Brandon and Tyler praise a RS over a BUYOUT when cashing out now at 27 cents would even give us LONGS MORE $ than if we waited for a RS and short attack???

    Personally If I decide NOT to cash out now, I'd RATHER take the chance at losing my money in a BK than a RS by Sirius. At least if we vote NO on the RS, I'll keep my 10,000 shares and there is still a CHANCE of some miracle happening either thru a buyout, GREAT news from Mel(HA!) or the economy turning around(HA!).....but at least theres a chance.

    With the RS...I SEE ONLY DOOM for us LONGS.

    Brandon and Tyler make it sound like Sirius the company will be no more. Puh LEASE. NO MATTER WHAT happens, the service we love WILL SURVIVE. THAT won't go away.

    We are talking about the stock here.

  2. Demian is offline
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    Joined: Oct 2008 Posts: 2,320
    10-23-2008, 11:36 AM #2

    I just bought another chunk today at .27.....

    My last buy was at .38 and I thought that was cheap!

  3. deewcom is offline
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    Joined: Jul 2008 Posts: 166
    10-23-2008, 11:59 AM #3
    I'm in your camp. RevSplit should be voted down. The writers here should not encourage readers to vote in favor of it at this point. You are correct, IMHO.

    I will short SIRI myself, if it does a Rev Split. Here's how. In the pull down menu, enter an order to sell short any number of shares. You do not have to own shares of any stock to short it. Obviously, it is counterintuitive to own shares that you wish to sell short. In theory, your broker borrows the shares from someone. In fact, as we know, this is not necessarily so (naked shorting). Your goal is to place your sell short order at the highest price possible. Then as the SP falls, your goal is to buy to cover at the lowest possible price. It can be hours, days, weeks or months away when you buy to cover.

    These are the basic mechanics of short selling. Practice it soon with a small amount of money on a stock you think will go lower (not hard to find these days) so you can see how it works. Then you will be prepared to short SIRI if you think that is a good bet if the opportunity comes.

  4. winagain35 is offline
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    Joined: Jun 2008 Location: Denver, CO Posts: 190
    10-23-2008, 01:01 PM #4

    Letís do some math, shall we?

    Letís assume that the company is unable to get financing and has to dilute in order to meet its debt obligations. Letís say that when they do this, the stock is trading at .30 per share and they do a 1:25 split meaning there are now 128mil shares Ė then they issue another 128mil shares to raise capital Ė about $900 million, which along with cash on hand should be more than enough to pay off the 2009 debt .

    Your 10,000 shares are now 400 shares Ė the initial split would mean youíd have 400 shares at $7.50, but after the dilution, letís say it drops to $5 and your investment is now $2k.

    Now Ė you have to look long term Ė do you think this company will be profitable? Do you think itís a viable business and do you believe in the product?
    Once the debt issues are settled and the company starts making money, this stock should once again command a market cap of $10billion Ė and thatís a conservative estimate in my opinion. And it would mean a share price of $40. Your 400 shares would be worth $16k. That may still be a loss for you, but itís much, much better than selling now at .27. The question is how long will it take?
    I know everyone believes that once the stock is split the shorts will go nuts. But remember fewer shares means itís harder to manipulate, and itísí harder to borrow shares to sell short. There are new regulations going into effect right now that will make shorting more difficult as well including talk of reinstating the uptick rule. Also with a stock price above $5 Ė more institutions will be able to buy and retail investors will be able to buy on margin. Itís not all bad. This is the scenario I see IF they have to do the split and diluteÖ and thatís still an IF.

    Itís hard not to dwell on the very worst case scenario right now, but if you look through the haze, there could be clear skies again in the not too distant future.

  5. otone is offline
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    Joined: Sep 2008 Posts: 243
    10-23-2008, 01:32 PM #5
    "Also with a stock price above $5 Ė more institutions will be able to buy"

    According to IR, it is currently 54% institution owned.

    I'm going to continue to hold, but I have a bad feeling that I'm going to learn a very very very expensive lesson. These huge losses every single day "almost" makes me laugh (I actually did laugh this morning). Can some of the experts here put this into perspective? What the heck are we seeing? .38 down to .27 in a few days? huh??? Is this for real???

    Is there something truly sinister going on? Is there some kind of manipulation going on? If so, to what end? Do you folks like Brandon, Demian, and any of the other longs drinking out of a half full glass of Kool Aid really think SIRI can get out of this... That we can get out of this while keeping our skins? I've got the intestinal fortitude to gut it out and I don't mind holding for a few years to make my money back or to even make a small profit.

    Just looking for some unemotional, non-CAPS feedback.

  6. homer985 is offline
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    Joined: Mar 2008 Posts: 485
    10-23-2008, 01:33 PM #6
    For clarity... a one for fifty reverse split ($0.27 to $13.50). If it is driven back down to $5, that is a 63% drop in equity value. Comparing using the current sharecount, that is a drop from $0.27/share (market cap of $864 million) down to $0.10 (market cap of $320 million).

    So you are saying that you think the market will value Sirius at a MC of $320 million, versus the current MC of $864 million? When you add in the debt, that's an enterprise value of $4 billion down to $3.5 billion.

    Is this what you're suggesting?

    FWIW, I estimate the tangible assets alone are worth $5.7 billion right now. And that's using the conservative estimate that Sirius has placed on the XM license.

    When you do the math, the tangible book value comes in at about $1.1 billion... which is $0.33/share. And there is still some value in their tangibles, which would probably take the book value back up over $0.40/share.

    My point... the company is already well under it's book value. Cutting the equity portion of the value by an additional 63% seems quite harsh. I'm not saying it won't happen, but that puts the company as a target for takeover -- which I believe it already is priced for right now.

    But at the same time, no one can predict the market... I just happen to think that the stock is priced for bankruptcy right now, because the Street doesn't think that Sirius will refinance all of the debt. But the silly thing is, IMHO a bankruptcy settlement would price the remaining value for the equity holders at a higher amount than it is right now...

    Another question is, is the Street pricing Sirius for bankruptcy? The FEB09 converts are still priced very high... if it was going bankrupt, they'd be under $20 right now.

    This is all perplexing...

    Last edited by homer985; 10-23-2008 at 01:36 PM.

  7. TSavery is offline
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    Joined: Jun 2007 Posts: 524
    10-23-2008, 02:47 PM #7

    for friggen

    I do not know where you are getting that I would be a fan of a reverse split. I am not. I do however recognize that one may need to happen. There are positive aspects of getting an equity above $5, but using a reverse split to get there is indeed frustrating.

    I understand the concerns everyone has. I have them myself.

    Brandon, Charles and I do not always agree on everything. That is part of what makes this site what it is. We have differing opinions, and a forum to allow readers to participate as well.
    Tyler Savery
    Satellite Standard Founder

  8. PMO is offline
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    Joined: Sep 2008 Posts: 55
    10-23-2008, 10:56 PM #8

    for deewcom (re. Today 11:15 am)

    Don't forget to mention that you need to short from a margin account...

    And don't forget to let newbies know the risk of a margin call, and of failing to cover wisely....

    Otherwise, I hear ya. I'll short the snot out of SIRI if it RS's--because guess what, that will be the major play.

    Long SIRI ... even to the pink sheets, but not to an RS knowing what the stock would need to increase to in order to just break even post R split.

    Anyone want to put odds on the condition of SIRI ( ) by the shareholder meeting? Unless there is a H-U-G-E surprise between now and the meeting the stock will be on life support and its relatives will be called in to get questioned about organ donations.
    Last edited by PMO; 10-23-2008 at 10:56 PM. Reason: (er, Today 11:59 am)