Karmazin Speaks – Will The Street Listen?
Sirius XM CEO Mel Karmazin spoke with Reuters today, and much of what he outlined should be seen as a positive for the company. However, the street needs more than good intentions and words, and even when a company delivers on their guidance, as Sirius XM did in Q3, people still look at anything with a jaded eye.
Karmazin made several statements, which in normal economic conditions would be enough to get some traction in the equity. Today, this news was simply absorbed with a shrug of the shoulders, and a show me mentality.
POSITIVE POINT #1
Karmazin sees double digit revenue growth on a percentage basis in Q4. Wonderful news that seems to have fallen on deaf ears. In a time when other media companies are seeing double digit declines, Sirius XM Radio is still growing, yet no one seems to care that Sirius XM’s revenue is a polar opposite to all of the bad news out there. Perhaps it is too difficult to grasp that there are still companies that are in a growth trend at this point in time.
POSITIVE POINT #2
Karmazin is confident the company can refinance debt due in 2009. Perhaps this issue is the overshadow that simply refuses to go away. Karmazin has been expressing confidence with this subject for a while, and this issue is where a “show-me” attitude is likely warranted. That being said, I have always felt that the company will indeed be able to get the debt issue resolved. I would have hoped that it would have been done by now, but still, it should get done. For the equity to see improvement, an answer on the debt needs resolution.
POSITIVE POINT #3
Karmazin has no immediate plans to cut its subscription prices, even in the midst of the economic recession. At a time when prices are being slashed left and right, you would think news that they will be able to hold the line would be news that is well received. Instead, the street barely reacts. This is substantial news. This means that churn is stable. It means that new subscriber numbers are satisfying the business model. It means that revenue can continue to grow. Perhaps the lack of a profit from Sirius XM tempers this news a bit, but with the continued positive trend shouldn’t the street give this a bit more weight?
POSITIVE POINT #4
“We did exactly what we wanted to do for Black Friday, which is not great news because we didn’t have high expectations,” Karmazin said, referring to the Friday after Thanksgiving, which kicks off the holiday shopping season.
While humble sales are not a positive point, the fact that the company was able to meet their expectations is stable. Had sales been shy of low expectations, the worry lines would rightfully appear. With the news being that holiday shoppers are being cautious, meeting your expectations is a small victory unto itself. On a side note, meeting those expectations did not come without an expense. Many retail radio’s came with free service for three months. Thus, you have a new subscriber, but n o revenue just yet.
POSITIVE POINT #5
Perhaps the biggest bit of news from the Reuters Media Summit was Karmazin’s statement that Sirius XM Radio is not for sale. “We don’t feel that we need to be acquired,” he said. “You should assume the company is not for sale.”
With stock prices at low levels, one distinct worry many may have is that the company sells itself. Investors who believe in the long term outlook of the concept of satellite radio would potentially be looking at a situation where they would not participate in the success of the company in the years ahead. Of course, there is no guarantee that the company will be an overwhelming printing press of cash, given that it has at times been a printing press of shares. However, those that have maintained faith in the concept should be able to reap the reward should it come.
In the end, it boils down to what transpires over the next few months. Will Karmazin’s outlook be realized? Will the street finally be able to digest good news? Will satellite radio be successful in refinancing their debt? There are a few questions that seem to be keeping many hesitant.
[Reuters]
Position: Long Sirius XM
Vapor.
Great move on the cash holdings. Give those guys my number. I would like to add a sub off my current one, and would greatly appreciate those terms.
What a Southern California day!
Hey Roadkill. 74 degrees baby. You gotta love it.
dread…socalrun..
the Xmp3 looks good but I guess no wi-fi..
Socal just call them, it was a pretty good deal, best of both 3 months free and I don’t know which radio it was, but the cost was only $19.00…But you have to activate this month..
It was great day in socal..i did not get the Xmas lights up..have to do that tomorrow.
vaporgold
SCRF, vapor, SH, FR – keep ’em coming. I’m enjoying your posts more than some of the hype articles. Thanks for keeping it real!
Newman,
The reality of the last minute Xm financing deals to consummate this merger deal is all on Mel my friend. The debate on whether or not it was the right thing to do will be known now only in retrospect. It will become great fodder for the MBA case study, but not much good to us now.
The ugly converts always get talked about because of the lent shares, but on Feb 1, 2009 the first interest payment is due on the 13% Senior Notes due 2014, on a principal amount of $778M, also done in the 11th hour. Throw that into the Feb 09, $210M due, and the COH is going to get stretched pretty thin. Hopefully they have been restricting cash for that $50M payment on these notes that are now going to be due twice a year.
It would be interesting to develop an objective Performance Standard for Mel or any CEO to be measured against from the perspective of the Investor. It might keep the back biting to a minimum.
One last note for Tyler and You.
The use of the term “sophisticated” or “unsophisticated” to address investors is inflammatory, and unnecessary in this discussion. It somehow sets up a “class war” among the ranks. Although one definition of sophisticated relates to a thing or idea being complex or complicated, the other definitions apply more to an acquired worldly knowledge or refinement, or being suitable for, or the refinement of sophisticates. IMHO This is one of Mel’s public speaking blunders. There is no need to make it ours.
If not Mel, then the stock price has screwed us all who have invested in this company. “Intelligent and Knowledgeable” investment debate doesn’t have to be unsophisticated.
rmahlab…..
I have had no trades in Sirius for quite some time/
cos….
The “sophisticated” discussion camne about because of what mel had said some time ago. I was not offended by it, but for some reason some people were. the facts are that mel was speaking to the people who in all probability do not even know to this day that he uttered the words.
What I find curious is people who will slam Mel on saying the words, and then turn around and insinuate that the $24 million in options was a) $24,000,000 in cash for Mel, b) given to him this year, and c)that he should forego those options.
The facts are that a)the options have a strike price of $4.74, and thus at this time are worthless, b) He received them prior to this year, and c) they were part of his contract.
Mel makes a humble base salary compared to many CEO’s. His bread and butter are in the options. With the price where it is, he is not getting his bread and butter.
I would not even bother the use of sophistication had it not come up by others. However, when others take offense to the sophistication comment Mel made, and then go on to make totally uniformed statements, it needs to be brought out. It looks as if despite what has been filed and discussed at length, there are many who will attack Mel’s compensation without even having a hint as to what it actually is.
My position is not to defend Mel, but rather show what is really there for anyone to see should they take the time to look.
If you will notice, the ones who foolishly wanted to debate the issue have gone away since the actual numbers have come out. Why is that? They attack Mel. They attacked me for pointing out the actual numbers, and went so far as to call me a “bonehead pumper”. I pumped nothing. I instead defended the truth in what Mel K. makes, and when he received his options.
The fact is that he makes 1.25 million per year. Whether or not he gets a bonus is yet to be seen. The otions were agreed to on day 1 (30,000,000 shares at an exercise price of $4.74 per share). They are currently way way under water.
I guess my main point is that if people are going to complain about Mel saying that there are unsophisticated investors, they should makeit a point to not make unsophisticated statements.
Yes, Mel should not have said it, but in many ways, those complaining about it are probably doing so becasue the shoe fits
Tyler,
I am in complete agreement with your facts and figures and found Max’s argument to be totally inappropriate and his argument obviously flawed. That makes him crude and uninformed. His anti-Semite comments were appropriately called out by you. His going beyond with name calling further debased him and the argument.
I also find that many of those who invest in this stock and blog, do not take the time to read the SEC filings for the company, which are readily available. Some simply to not be interested in the truth. I describe some of these folks as unwilling longs who got caught up in the Merger looking for the Pop which never came: Merger Pop Wanna Be’s. They have been dragged into that long position with a short term strategy and are willing to lash out base on what they hear.
Too much of what they hear is written by those who post that are only interested in spinning events like it was a subjective discussion of what they think the facts are, or should be. Incomplete information by some groups looking to further a tangent agenda doesn’t help the situation. Personal attacks directed at those who disagree are everywhere and have come to a boil with the current stock price, and the annual meeting around the corner.
I have always respected your ability to present the facts and to employ a rational opinion, based on common sense, when called for. My comments about Mel’s public speaking blunder in describing his investors as “unsophisticated”, and then not justifying his remarks by following in his footsteps were, of course, a suggestion. Thanks for your remarks and your commitment to your readership. Oh, and of course Mel doesn’t make $32M per year and, as you have explained here and on Seeking Alpha, those options are worthless and even more so with a RS.
Before anyone remarks, I know the day the RS happens the options will be just a worthless as they are today, but the climb up hill will be perceived as more difficult. One of the psychological disadvantages of the RS even though mathematically it is the same.
Twas the night before the meeting, when all through the house
Not a shareholder was screaming, not even the spouse.
The stocks were filed by the chimney with care,
In hopes that St Mel soon would be there.
The children were nestled all snug in their beds,
While visions of refinance danced in their heads.
And mamma in her ‘kerchief, and I in my cap,
Had just settled our trades for a long winter’s nap.
When out on the lawn there arose such a clatter,
I sprang from the bed to see what was the matter.
Away to the window I flew like a flash,
Tore open my portfolio and threw up in the trash.
The moon on the breast of the new-fallen snow
Gave the luster of mid-day to objects below.
When, what to my wondering eyes should appear,
But a mini Mel, and eight tiny reindeer.
With a little old driver, so lively and quick,
I knew in a moment I must be sick.
More volatile than markets his coursers they came,
And he whistled, and shouted, and called them by name!
“Now Goldman! now, CITI! now, Lehman and Wamu!
On, Weinkes! On, Cramer! on, CNBC and Indymac too!
To the top of the porch! to the top of the wall!
Now Sell away! Sell away! Sell away all!”
As dry shares that before the wild hurricane fly,
When they meet with share price, mount to the sky.
So up to the house-top the coursers they flew,
With the sleigh full of radios, and St Mel too.
And then, in a twinkling, I heard on the roof
The prancing and pawing of each little hoof.
As I drew in my head, and was turning around,
Down the chimney St Mel came with a bound.
He was dressed all in money, from his head to his foot,
And his clothes were all tarnished with shareholders afoot.
A bundle of radios he had flung on his back,
And he looked like a peddler, just opening his pack.
His eyes-how they twinkled! his dimples how merry!
His cheeks were like roses, his nose like a fairies!
His droll little mouth was drawn up like a bow,
And the beard of his chin was as white as my sole.
The stump of a pipe he held tight in his teeth,
And the smoke it encircled his head like a wreath.
He had a broad face and a little round belly,
That shook when he laughed, like a naked short selling.
He was chubby and plump, a right jolly old elf,
And I cried when I saw him, in spite of myself!
A wink of his eye and a twist of his head,
Soon gave me to know I had everything to dread.
He spoke not a word, but went straight to his work,
And took all the shares, then turned with a jerk.
And laying his finger aside of his nose,
And giving a nod, up the chimney he rose!
He sprang to his sleigh, to his team gave a whistle,
And away they all flew like money out the window.
But I heard him exclaim, ‘ere he drove out of sight,
“Happy loses to all, and to all a good-plight!”
Sorry, I could not help it!!! 🙂
vaporgold Says:the Xmp3 looks good but I guess no wi-fi.
I saw something on that page about being able to download songs from napster. But nothing on wifi, sorry.
The XM2go® Music Manager: Organize Your Music and Keep It Fresh.
* Schedule to record your favorite XM programs.
* Create / modify playlists of your XM recordings or your music collection.
* Rip CDs to MP3s or WMA and add them to your Music Library and store on a microSD card.
* Bookmark and purchase songs from compatible online music services including Napster.
cos….
Thank you for the kind words. I find it amazing that so many people do not take the time to simply read, and more amazing still that they will then profer an opinion based on nothing more than intuition.
Hey Tyler,
Your work is appreciated here, and makes the research less of a headache for most of us. I hate it when you or Brandon/Newman or anyone gets flamed for just trying to help out. Keep up the good work, and its BEER TIME for me. 🙂
(I will probably get flamed for this).
DREAD
that’s quite a post (well composed) with a xmas theme. Let us all hope it is just not going to be that way this xmas. You should send that to investor relations.
Dread.
Your post is exactly why this blog is here. And I get it! Thanks for the effort. Like Hope said. Send it of to Sirius/XM. A classic.
Hey Tyler. Your take on Mel’s salary is solid. I have seen many times over on various medium, posters criticism of his salary. Actually basing his potential on options, should be something a unsophisticated investor would want.
COS. Good to see you back posting. I enjoy your posts.
GIS. Thanks man. “Real” is what you have after all the fluff, glimmer and shine have been removed. You know what I mean. I know you do. And anyone still posting as a long is definitely down to “Real”.
I agree with Vapor. That venting in this format, or simply posting thoughts and ideas, regardless of their theme. Can be simply convalescing from the strain.
Tyler,
It’s really nice that you are so positive about Sirius and very informative too, but you act like an insider, who is not buying stock at these prices…Why ?
cos1000 says: ““Intelligent and Knowledgeable” investment debate doesn’t have to be unsophisticated.”
And that is all I am looking for. KNOWLEDGEABLE and INTELLIGENT debate. Not baseless name calling and uninformed statements. Anyone who backs up ANY statement, good or bad, with facts that support it will garner my respect and appreciation.
Most on this site already have earned my repect. cos, homer, socal, and more… I just get a tad irritated when I see basesless bashing when they cannot give facts to support their argument, or they WILL NOT give them, because the facts negate their argument.
GS…..
My initial investment into Sirius was long ago. The stock was very inexpensive, and veryspeculative at the time. the company had just done a recap.
In 2004, Stern was announced, then Mel. The stock ran up to areas where it was overbought. I sold most at that point.
I held some shares, and traded shares for a while, and got to a share level that I was comfortable with. I have pretty much maintained that level ever since.
I find that other investments are more profitable for me.
Newman
I understand your frustration. Censoring is not a viable option because it then changes the focus of the objections from baseless comments without supporting facts, to arguments about negating decent towards your view. Authoring articles in general is risk taking on your part for which there are few enough rewards. I enjoy your articles and of course, the debate that follows. Keep up the good work and enjoy what’s left of the weekend.
Newman.
I second cos post above. Your points are valid.
Second paragraph is the exact description of the weakness of this format at times. Posters can drop a bomb and run.
Wish I could say I’ve never done that. Apologize for my frustrations coming out at times, in a far to emotional/personal level. As I told Steve, who rightly called me out, for excessive whining.
I’m expecting to be a two stroker until the decimal point moves over one to the right.
On another subject Newman. Do you feel the forums and comments sections have fallen some in quantity of posts.
I ask because I have noticed what appears to be a significant drop in posts on other sites like yahoo, and just wondered if this site has seen that.
Can’t help but feel many passionate posters, have taken shelter until, or in the hopes of some good news on debt.
Thanks again for your efforts. .16 will simply be a stick up my arse until something improves.
Hey Tyler. Looking for any tips on other ticker symbols. Feel free to send a live one our way. lol. Take care.
cos1000 Says:
“Tyler,
I am in complete agreement with your facts and figures and found Max’s argument to be totally inappropriate and his argument obviously flawed. That makes him crude and uninformed. His anti-Semite comments were appropriately called out by you. His going beyond with name calling further debased him and the argument.”
cos1000: Okay, what is the Truth related to Sirius/XM Radio, its CEO, and shareholders?
Your post to Tyler calls my comments anti-semite. As I mentioned to Tyler, and now to you, that’s offensive to Me. P.C. is about as useful as a second nose.
Go ahead, cos1000, tell us all the Truth. Its too easy to simply stroke the MB host with posts.
Lastly, you do remember your December 6th, 2008 at 9:00 pm post to Newman?:
“I do believe Mel’s decision to put the common shareholder in a position to be hurt is his alone to own and to have his performance evaluated harshly on.”
Sounds tremendously uninformed and unsophisticate by your own measure?
Max,
you wrote:
No more dilution, no reverse split, no Executive perks, not even a holiday party for his Jewish pals.
Not even a holiday party for his Jewish pals would appear to be anti-Semite to me. What? He can have a holiday party with everyone else, but not his Jewish pals?? Just nonsense on your part and if you are offended by being called on it, ask a Jewish friend of yours what we’re talking about.
If by Truth, you and I can agree that we are talking about the state
Sorry Max,
submitted too soon…..
If by Truth, you and I can agree that we are talking about the actual state of things as they are in contracts, financial statements, or historical events for this company, say in the last year, then what is your question?
Max,
Also if by stroking the MB host you mean agreeing with his position then I guess that’s what I am doing. If in your world the only way to disagree is to attack posters’ and MB host’s by calling them a “bonehead pumper” then maybe you should lay out your rules for debate so we can all play along. Your name calling, difficulty in answering direct questions, and use of unnecessary and unjustifiable remarks in general, make it very difficult to even want to continue this discussion.
cos….
to be fair, max did not call me a “bonehead pumper”. That was Stocklooker. However, Max has failed to discuss the compensation any further, and by his ignoring the subject, it allows others such as stocklooker to continue to carry a belief about Mel’s comensation that simply is not acuarte. Because Max will not step up to the plate, and because people simply refuse to read for themselves, even when supplied with links, there will still be those that believe that Mel’s compensation was $32 million in 2007.
My taking a stance of presenting the facts has nothing to do with pumping or defending Mel. However, if people are going to slam Mel with stuff that is way off base, I will correct them and try to get them on the path of looking at facts.
Ironically, Max has now come back, yet still refuses to acknowledge the CEO compensation. It would appear that now that the errors he was making are showing a much different story, that he wants to move onto another subject. That is fine, but I always find it best to bring closure to a subject before moving on.
Speaking of new subjects, let’s deal with the post merger financing.
Converts are issued all of the time. Typically they are not the first choice because the holder of the converts will short the stock.
People want to be critical of the deal. That is fine. What many people ignore in this is that Mel was able to get the banks to agree to go long one shre for every share at market prices that was shorted.
This move was something that was smart of Mel to do. He knew the convert deal was not the best deal, but wanted to get something out of it beyond the normal convert deal. Getting the big players to agree to go long will increase institutional ownership, and at some point will carry a positive impact.
I do not believe that the positive impact will erase the negative, but it is better than having nothing at all.
It is interesting how everyone only brings up part of the deal, and not the whole deal when discussing it.
This may give the company a better chance at getting financing, or at least some of it, through the companies that have to take the long position.
Did the convert deal whack the pps. Yes it did. Did they have much of a choice? No they did not. People wanted them to have the financing ducks in a row prior to the FCC announcement. There is only so much of that that they could do, and with-out knowing when the FCC would close, no bank in their right mind would lock anything in unless they wer getting a pretty penny for doing it.
Max,
I apologize for misplacing the comment, my bad.
Okay boys, I’ll discuss Melvin’s compensation. No problem. I’m calling on Melvin to forego his compensation, direct or indirect, period.
Can’t lead if you won’t lead.
Imagine, for one minute, Melvin sees his V.P. of Sales not making or exceeding his quotas or targets for, say, 9 Quarters in-a-row. Do you think said V.P. would still have compensation or a job? Do YOU think this same V.P. should be retained??
Tell me, Tyler or cos1000 if you agree or disagree.
With what you may or may not know about Karmazin’s hard-nosed management style would you believe he shouldn’t be held to the same standards, especially by shareholders, as he would for someone within the Sirius/XM Radio organzation? I do.
And, not to beat a really dead horse, but out of the Mouth of Melvin, in a nationally broadcast television (cable) spot, he did set the measure for how a CEO should be rated*. Thems the facts, fellas.
*Melvin stated that a CEO’s report card is the PPS.
cos1000, I await your comments on the truth of the above statements.
Tyler, a question about the long positions taken for every share shorted. The purchasers of the notes that short the underlying equity will for every lent share sold (short), are expected to purchase common shares on the open market and/or to enter into derivative transactions providing them with a synthetic long positions equal to the number of shares.
The question is what form do these derivative transactions take? Also from the prospectus it only says that they were advised that this would happen by the underwriters. Are they simply going to take that long position after they hold their short position for an opportune period of time and then purchase the shares, take the profit on the short, and now hang in there long??
Max,
Let me work my way backwards through your last post.
1. That Mevin stated that a CEO’s report card is the PPS…………..
I don’t know if those were his exact words, but the essence is the same and I agree that he said it.
2. With what you may or may not know about Karmazin’s hard-nosed management style would you believe he shouldn’t be held to the same standards, especially by shareholders,….
I have no direct knowledge of Mel being a hard nosed manager or not. That would appear to be pretty subjective and dependent on point of view. As to whether or not he should be held to the same standards as his V.P. of sales, I would say absolutely not. As the CEO of the company, and the individual along with the CFO reporting to the B of D, the standard he is held to should be commensurate with the wide range of administration his position entails. Compensation should be determined by the Compensation Committee and reviewed and approved by the Board of Directors. His continued employment should be measured by objective and subjective criteria established by the Board of Directors, who are voted in or out by shareholders.
3. Imagine, for one minute, Melvin sees his V.P. of Sales not making or exceeding his quotas or targets…..
This created scenario is irrelevant to how I would want Mel to be managed by the B of D, Institutional Investors, Substantial Shareholders, and the rest of us common share holders
max….
It depends on how the sales guys salary is structured.
regarding the PPS being the report card.
In normal times this is accurate. We are not in normal times any more. Mel made the statement in normal times. Things differ now. You should be able to see that. An earthquake has rocked the financial world, and the system is in a meltdown. Certainly you can see that the PPS is being impacted more by outside influences rather than strictly in the control of the CEO.
Car sales are down. A salesman who has sold 10 cars per month is now selling three. What does the dealership do? They do not fire the manager. Despite bad times, the dealership still needs to be managed, and the managers track record is good. They understand the circumstances are beyond the control of the manager. They lay off sales staff to fit the need of the company.
Thus, knowing that the pps of this and many companies has been whacked, and people are out of the market, a reasonable person would look to how the management is performing on company metrics. The metrics are not terrible. They are not awesome either, but they are not terrible.
Should we judge your abilities based on the fact that you did not understand mels compensation? You were short-sighted with that, and now you are proving to be shortsighted about the “pps being the report card issue”.
Mel to forego his pay? that is absurd. No one wants to work for free. If this company was not merged right now, there would be many issues that people want to ignore. Chrysler, Sirius’ largest OEM parter is about to go under. Ford’s sales are off by a country mile, as are everyones. At least with the merger they have a chance to make the numbers work more in their favor.
Max,
I have already pointed out several of Mel’s public speaking blunders that have created controversy and changed focus from the important points that need to be addressed to investors. His flippant manner has hurt his image during these difficult times and in turn shaken investor confidence in his ability to look out for their best interest.
I do not feel that this is an us against them, you against me, or the world against Mel debate. This is a forum for ideas to be floated, and rebuttals to be made based on facts on hand trying to get to the actual state of things, the Truth. The past is known ,but is not necessarily a prophet of the future. Interpretation of past events, given the information available to the average investor is severely lacking. Short positions taken, Institutional Ownership, whether they are buying or selling positions are all data points that only provided on a quarterly or biweekly basis at best. For a stock like SIRI that trades over 50M shares daily, knowing what will happen tomorrow is a crap shoot. Combine that with all of the events happening in the macro economy and you can see why this is not an equity for the faint heart-ed. As an investor it is tough enough to analyze how the company is executing its business plan, but to try and micromanage the company’s operations as a retail shareholder is just plain unrealistic. Invest or not, buy or sell, make a little money and move on. When you find a good thing, hold on to it. If something hurts, get rid of it. JMHO
The pps as a report card…..
If someone wants to hold Mel to that measuring stick, that isfine. I ask this.
You oust the current CEO and bring in a new one. Will the PPS be a measure of their performance as well? Or will the new CEO get a pass on the yardstick?
My contention is that no one would have done any better or worse than what Mel has done.
revenue is good. subs are okay. churn is good. Debt is okay, but time is running out. cost cutting is good.
Siriushope/socalrunningfool
Yeah, I should have done the Grinch instead lol!!
Just had to vent, and hope it doesn’t come down to us losing our investments. At least Mel is in the same boat.
Real credit goes to(Clement Clarke Moore), for a good poem.
11 more days, just hoping for good news!!
Tyler Savery Says:
max….
It depends on how the sales guys salary is structured.
I did mention 9 Quarters in-a-row, didn’t I? LOL And, the economy was not a question for over 1/2 of that time and you still cannot let deadwood drift away? Wow. Are we talking about American Business or what? Nine quarters of sub-par performance by a V.P. of Sales and the guy is still manning the corner office? We’re dooomed. Car sales analogy or not, that’s over two year’s of non-performance. Melvin has had twice that length of time.
Man… good thing this message board doesn’t rely on making a profit… or something.
Tyler… Melvin’s decline as a CEO began in better times. Perhaps he and his “c” level staff were too busy abusing the expense reports?
Is that possible?
Or, does the B.O.D. stand mute to what’s going on… been there, done that. CEO typically can place board members who will overlook poor performance by “clubhouse buddies”. Another notch in the decline of this company and the structure of successful enterprises, IMO.
Tyler posts:
“Mel to forego his pay? that is absurd. No one wants to work for free. If this company was not merged right now, there would be many issues that people want to ignore. Chrysler, Sirius’ largest OEM parter is about to go under. Ford’s sales are off by a country mile, as are everyones. At least with the merger they have a chance to make the numbers work more in their favor.”
Um, I believe one of those fellas mentioned he would work for a salary of $1.00 per year until things get straightened out… it’s called survival. Poor Melvin obviously needs ever nickel and dime. (which by the way, just about adds up to the price of a share of Sirius)
Sure, no one wants to work for free, nor do I. I cannot fathom $.16 per share either, which as an investor is worse than working for free. And, the only logical human responsible for $.16 per share is the man who stands to benefit the most if the company survives. Shareholders are being chewed up and spit out by the August financing. Melvin still receives a paycheck. Something’s out of whack.
Sure, he has an employment contract. I’ve read some of it, but he’s obviously earning based on his PAST, not his current performance. Shareholders, on the other hand, are receiving value base on Melvin’s current performance.
Argue that.
Socalrunningfool, I get it just fine. I think you are the one having problems getting it. For example; did you give credit to Mel (other then the hype of him just joining) for the PPS getting to 9. Are you getting it, it got to 9 because of hype and should have never been there in the first place. Mel did nothing for SIRI in the time it got to 9. Mel has done everything he could do cut cost, increase ad sales, and subcribers, ect., ect. the company is in the best position it has ever been in. Except for financing which if there was not the total melt down there was would not have even been a problem for them. Lets not forget that the melt down started just as the merger took place and it sould be considered amazing that Mel was even able to get about a billion (most was XMSR)of it done on such short notice. Yes I say short notice because I agree with what Tyler said. I also have little doubt that after the end of 2007 or shortly there after, any plans Mel had to finance the merger in princible, went up in smoke.
cos1000 (D), I dont blame Mel for the decision to get the merger complete. I have a feeling if he did wait, then people would be mad and blaming Mel for not doing everything he could to get the financing done ASAP because of the delay that came from the NAB or any other yahoo that filed suit against the merger. You see cos1000, instead of talking about the bad deal to get it done you would be talking about why is this merger still not done. Once again it is a matter of 6 of one or a half dozen of the other.
Max, that same man was getting 22 million in salery and bonuses the year before. Mel was getting about 5 million. Ford jr. also did work for a dollar a year when he took over working control but had controlling intrest in the company.
I don’t think Mel is overpaid.We all know what his stock is worth.
His performance and any CEO’s performance should be rated on the return to the stockholders of the company period.This is, and is suppose to be about making money.
One problem we have in this country is the excessive pay and golden parachutes of CEO’s of a lot of companies.In the last few years you would have to be living in a cave to not have heard about the over paid CEO’s.
At times the performance of some of these CEO’s have been appalling.
vporgold
max….
Do you understand the dynamics of this what is happening?
I am glad someone else was able to point out the stark diff. in the auto execs.
Mels pay is 1.25 million per annum. Plain and simple. The bulk of his deal is options that at this point are worthless. The impact of this issue is effecting Mel in a drastic way.
Max, you have an acxe to grind with Mel. You have made it a point to neot acknowledge your errors in this whole debate, nd simply want to go to the next thing and the next thing.
What i mentioned was how the sales guy was paid. If he is paid by what he brings in, then he will not be getting paid much. I also gave an example of how an economy can impact the situation.
What percentage of Sirius’ issuesdo you assign to the economy? That should be a factor in your thought process
John
I wasn’t trying to place blame with my comments to Newman. I was holding him accountable as the CEO for making the decision to move forward with the merger and use shareholder equity to finance the deal. We are yet to see the wisdom of his decision. It is the single most significant event that has driven the SP down to these levels. As I said before the fact that he made the decision cannot be denied, it can be rationalized, but not denied. What we could be arguing about is really irrelevant.
John
Further to consummate this merger he renegotiated:
1. XM’s 1.75%, 400M convertible debt due in Dec. 2009 to 10% and is still due on 12,09.
2. He had XM utilize the 250M and 100M Bank credit facilities fully to pay of the GM credit facilities and close them down, that are now due in May 2009.
3. He had XM make an offering to raise $778M in 13% Notes due in 2014,
4. He also had XM make an offering of $440M, 7% Convertibles, backed up by the lent shares, to short the stock, due on 2014.
He basically took on $2Billion of XM debt to do this deal of which, $750 M is due in May and Dec. of 2009.
Sirius as a stand alone company, had roughly $389M due in Feb and Sept of 2009.
These are the facts as I understand them. As I said the decision was his, with the blessing of the board, and the decisions wisdom is yet to be decided.
By the way John, I left out the repurchase of the transponders and Sirius’ proposed satellite launch to not confuse the debt issues and more than they already are. There is also $1.75M here and the Honda note for around $80M that may convert to shares if they can get the price above .67 / sh. A few months ago, converting that debt to shares was a given. I am not saying that they won’t be successful, but their debt issues are considerable.
cos1000 – nice reporting of very relevant information.
Tyler,
You said:
“What i mentioned was how the sales guy was paid. If he is paid by what he brings in, then he will not be getting paid much. I also gave an example of how an economy can impact the situation.”
I say:
If the sales guy is not getting paid much, because his performance is not resulting in revenues, then who makes the decision as to whether the sales guys is still in sales, and thereby being paid??
Now, replace “sales guy” with “Melvin Karmazin” and see if you come to the same conclusion.
Apparently, Melvin is somehow exempt from all detrimental effects on his employment? Amazing to me.
And, in my scenario, the Economy was NOT a factor 9 Quarters ago… yet, you have yet to acknowledge this portion of my scenario, preferring instead, to only look at the 3rd Qtr of 2008 (August debacle financing).
What % of Sirius issues do to the immediate economy? Not much. My assertion is that Melvin has been taking this company down for more than a few years. And, if he was any type of a Leader, he would have pulled Stern by his nose and made him live up to the non-existent “2nd Push” for subscribers. Instead, Melvin went on a spending spree for “more content”.
His August decision to hasten the decline was his decision which He attributed to the economy. Nonsense! The deal was, I believe, a deal to toss a bone to his “holiday buddies” I mentioned in one of my earliest posts, who now control the destiny of the company, with Melvin’s approval, and they are making a bundle, while shareholders are demeaned and defeated.
Sure, I’ve an axe to grind with Melvin. You betcha, to coin a phrase from the former GOP V.P. Candidate. Real dollars are in play here, and lots of losses can only be attributed to the results posted by this company under the current CEO’s tenure.
Maybe it’s human nature to look for someone to blame when things don’t go the way we expect. But wanting to blame Mel is absurd. Nobody @ Sirius Xm is trying to commit company suicide. When Mel was fighting for the merger we all were on his side. The NAB was the enemy! Georgetown Partners were the enemy! The FCC & DOJ were the enemies. Know that he won the hard fought war we want to hang him for treason? Was it his fault it took 18 months to get the merger passed? Was it Mel’s fault the economy tanked? Is it his fault that the Detroit 3 are in trouble? Was there a movie that Oliver Stone made on “The Sirius Xm Conspiracy” that I missed? Most all of us have lost money on paper or in cash. If you look at what Mel & his staff have recently reported, with what the company is up against it might be getting close to buying time. When the Detroit 3 get their money and Sirus Xm re-finance their debt then as the economy recovers I believe the stock will rise. The bottom line is it’s a great product that’s getting the fat cut out. I think the stock is @ it’s low.
When I suggest to people that they get satellite radio for someone as a gift this holiday season, the look they give me basically says “You’ve got to be shiting me!” If I asked them if they had herpes, I would get less of a reaction. So no, the street isn’t listening – and nobody ON the street is listening.
The marketing of Sirius/XM has been a disaster, and I blame Mel Karmazin for that. We live in a country of ignorant shopaholics who will buy practically any piece of crap you stick in front of their faces. They have a great product – why don’t they stick it in front of their faces!? If satellite radio can amass 19 million (allegedly) subscribers without getting the word out, what do you think the number would be if they made even a feeble attempt to promote the service?
How is it that I love the product, listen to it for hours a day, and never tire of it or cease to be amazed by it? Am I some kind of a freak or something? What on earth has lead to the decline of radio? Why is it so uncool? I just don’t get it! I don’t know how people can resist the spontaneity of it, and in the case of satellite, the sheer enormity of the content. I can only reach one conclusion; the majority of people in this country are ignorant, conformist morons who have an insatiable desire to follw the lead of the crowd. They are totally controlled by the media. I hardly have any friends, because I cant stand most people. People in my own family make me sick!
What Mel has to do is get the attention of the small percentage of the population that isn’t completely stupid and clueless. I say there is, potentially, another 10 to 20 million subscribers out there who he hasn’t tapped into. After that, good luck; too many people will NEVER pay for radio. They either don’t listen to radio at all, or they just don’t care about music, news, or entertaining talk shows. In other words they are just too fucking stupid to appreciate what satellite radio offers. They are a lost cause, and Mel will never get through to them. He must find a way to persuade the “potential” group.
LIke I said, just put it in front of their faces, Mel. What are you waiting for? Is this just too simple for you and the other geniuses to figure out?
Senator Dodd is thinking like me.
Headlines:
Dodd: General Motors Executive Should Resign in Exchange for Bailout
Sen. Chris Dodd called on the CEO of General Motors to be replaced if the auto company is to receive any bailout money from the federal government.
The Link:
http://www.foxnews.com/politic.....e-bailout/
Well, fellas. Is Dodd wrong, too?
Dodd should resign because he is part and parcel for the housing collapse.
Dodd is a complete fraud.
Neal. Did you really write “I think we are at the bottom”? That is this years winner. It’s .16 Neal, it hit .08. I guess your prediction is pretty safe………………
Jon oh Jon oh Jon.
When you decide to get to real time, feel free to address me.
Otherwise, I’m of zero interest rehashing the past.
If you want to start with say tomorrow’s opening price. The RS and dilution vote coming up in a few days.
The debt issues all of next year. Then have it. Otherwise you have me confused with someone else Jon.
Here it is Jon. I’m a pps guy. That’s pretty much it. Those things that effect it’s “current” pps, are truly all that I have any interest in.
Hey COS. Nice of you to break out you keystrokes this weekend. Your debt breakdown above,is the best I’ve ever seen. Thank you.
Hey Roadkill, you pull a Gump, and keep running , or just find something of more interest. Or as Steve wrote, did someone put something in your face? LOL.
Later
This Auto bailout w/ congress is a dog & pony show. The Detroit auto industry lobied the congress to lower the cafe standards for years. The congress takes the lobiests money and goes along with the game. Now the congress blames the Detroit 3 for being behind the curve. They should fire the CEO’s and then we should vote out the congress. Just look @ the oil embargo 35 years ago. The Dept. of Energy raised the cafe standards. Then over the last 3 decades they lowered them. Bush even gave tax breaks for buying SUV’s & Trucks then tells us a few years later “We Are Addicted To Oil”! No wonder the rest of the world has no respect for us. We have no right to complain about the economic problems were in. We voted these self serving politicians into office. I saw Brokaw w/ Obama on “Meet The Press”. I sure hope what we see (and hear) is what we get.