Merrill Initiates Sirius Coverage With A Sell
REPORT EXCERPTS
Prospects improved by merger, but a tough road near-term
We are initiating coverage of Sirius with a Sell rating and a fair value estimate of $2.30/share, a 20% discount to our YE2008E per-share DCF value of $2.89 pro forma the pending XM merger. The merger is likely to generate tremendous long-term cost and revenue synergies, in our view, worth $6.5bn in NPV terms. The share price is broadly reasonable in relation to our base case DCF value. However, top line expectations for 2008-09 continue to slide and still look too high. Refinancing the XM balance sheet at the merger closing will be costly, with substantial equity dilution possible. We believe it’s too early to buy the stock.
Post-merger base case looks OK but very uncertain
The long-term market potential for satellite radio is the key to valuation – but is highly uncertain. Our base case DCF valuation of $2.89/share assumes growth from 17mn subs at YE2007 (5.6% of the US population) to 40mn subs (12%) in 10 years; our valuation drops $1/share at 30mn subs and rises $1/share at 50mn subs. Substitutes (notably the iPod) have reduced the addressable market and will continue to do so, we believe. But the merger should help to offset this pressure with expanded content, tiered pricing and a simpler marketing message. So should the continuing growth in the rate of satellite radio pre-installation by car makers. With deep post-merger cost-cuts, EBITDA should turn positive next year, with margins nearing 40% by 2017E.
The near term looks tough
We expect subscriber growth to remain soft in a tough economy. For the two companies, we forecast 2.8mn subscriber additions for 2008 (653K for 1Q08). We believe our estimates are substantially below consensus.
Summary
We are initiating coverage on Sirius Satellite Radio with a Sell rating and a theoretical fair value estimate of $2.30/share. There are no reasonable comparable companies, in our view, so we have used a DCF-based valuation. The pending merger with XM Satellite Radio has received DoJ approval (on 24 March) but is still awaiting FCC approval, expected within weeks and considered very likely. Our base case post-merger YE2008E DCF value is $2.89 per share. We have applied a 20% public market discount to this valuation, which reflects
- the high level of uncertainty about the long term market size;
- our view that near-term expectations for revenues and subscriber growth are still too high; and
- the challenges of refinancing the XM balance sheet and the possibility of equity dilution.
We note too that FCC transaction approval is believed to be likely, but is not certain. We project substantial (50%+) downside in the share price if the transaction is not approved. We model positive EBITDA starting in 2009 and positive FCF starting in 2011. The basis for our valuation and our sensitivity analysis is set out beginning on page 20.Please note that our valuation is based on our projections pro forma the XM merger, not the stand alone financials shown on pages 1 and 2 of this report.
Position – Long Sirius, XM.
I just wondered with all the negative press about the slow retail growth of satellite radio sales if there has been a study conducted to see what the impact is, if any, of consumers waiting for a final decision of the merger before they buy a receiver(i.e. post-poning buying because they don’t want to have to buy a new (interoperable) radio to enjoy the total offerings of a merged company.)
Another asshole anal-yst chiming in late in the game. Campbell appears to have had a lot of time on his hands to write a scathing opinion on a $2.50 company. The question everyone should be asking is what was ML paid by opponents of the merger to write this bullshit opinion?
My favorite part of this analysis:
Merger synergies are worth 6.5 billion on an NPV basis.
Current Market cap of the company = ~7.2 billion
Price target of 2.30 means the company is worth less than the synergies… nice…
Also, like I said… ARPU of 9 in 2017?!!!! Are you f*cking kidding me? To be clear, on 40 million subscribers assuming his 88% incremental revs go to ebitda that means that if ARPU is 10 bucks thats more than another 400 million in ebitda a year.
At 12 (assuming they get more ad revenue and/or offer more services like data, weather, traffic, etc) thats another 1.2 billion in ebitda a year.
The guys is positive on the merger but has a $2.30 target? I guess he thinks the merger will eventually lead to a bankruptcy???
Pass me the Tylenol. This is insanity.
The fact is , as of 12/31 Merrill Lynch had
4% ownership of Clear Channel I think this
SELL RATING is very suspect. Especially
Since Merrill Lynch had a BUY rating and
$6 target price in 2006.
http://tinyurl.com/6lousj (Edited URL because it was meesing up the site. URL is safe – Tyler Savery)
http://photos1.blogger.com/blo.....mlinmg.jpg
I personally love it. When I sold half my shares when it hit 8, I never thought I would see this price again. Man it is amazing SIRI almost 3 years ago was about this price had what, about .6 million subcribers. Now they have 8.3 million plus first quarters 08 subcribers. They are adding almost as many subcribers a quarter as they had in total at this price 3 years ago. 4 and half years ago I thought it was a gamble, Now I feel it is more of a waiting game. To everyone out there, dont be pissed off about the price just put some of the profits back in. It is a much better investment now, then it was almost 4 years ago at this price again.
Reality is setting in. What happened to Mancini’s $8 a share or whatever? They fired Nabi because he was too negative on Sirius; now they fire Mancini because she’s too positive. Then, they hire this guy who is negative on Sirius again.
These companies, merger or no, are lost causes. Imagine what will happen as the reality of the transaction sets in, and it is realized that the synergies aren’t there.
Unfortunately, this guy is probably giving Sirius the benefit of the doubt with this new target.
Hey hippo,
What is reality? What level of churn? what level penetration? What ARPU? What SAC?
Lost causes? Please quantify anything you say or don’t even post you f*cking idiot.
What level of FCF in 2010 2013 does this target represent?
Hippo, as I have said before it is the wait that speculative investors dont like. They were expecting the merger a long time ago. Now they are being told that the merger is not enough, that they are going to have to wait another year or 2. After thinking that just the merger was going to be the catalyst the stock needed to get out of this channel of trading. It is to much for many that think they can go to some other stock to make a quick profit in that time.
I agree, short term there will be not much movement. I also remember when XMSR was trading between 12 and 15 range, then took a dive to 2 and 3. Two years later it was at 40+, for no other reason then its growth rate. Now correct me if I am wrong but you owned XMSR then also. So by your contention XMSR is a worse investment now then it was about 4.5 to 5 years ago.
>>> So by your contention XMSR is a worse investment now then it was about 4.5 to 5 years ago.
Of course it is. This isn’t even subject to question. The problem of growing the business is far more difficult with 8M subscribers than it is with 1M (since you are losing a more-or-less fixed percentage to churn every month). Further, they now have far more debt, growth has slowed, cash is not as available, five years ago XM was the only competitor, now there are two.
But most importantly, the ONE thing that makes it a far worse investment than 5 years ago, is that 5 years ago fixed costs were a measly 150M/year. That’s right. Both companies went insane with fixed cost spending, expecting the growth to come, and it IS NOT COMING. That’s not to say they won’t continue add subscribers, but it is not going to be nearly as fast as we expected back then.
The merger may give the stock a little pop, but the reality is that if it were going to help much we’d have seen some indication of that when the DOJ approved — almost everyone envisioned DOJ as the bigger hurdle. I really expected Sirius shareholders, who are known for their over-reactions, would run the stock up a bit when DOJ approved. But it totally caved and has now sunk to new recent lows.
I just can’t see why anyone want to own either of them anymore.
Hippo, What I dont get about your whole churn aspect, is if that is the case it would be your position that they not get so many subcribers because that is going to lead to more loss of subcribers in the end due to churn. If that is your position it is a outrageous one. What should matter is how much the level of churn has gone up in ratio to the number of subcribers there are added and the type of deals that have been made. One would expect churn to be higher considering OEMs. Also to say that there was only one competitor would be delusional, what did you think SIRI was going away?
Next growth has slowed is, I would guess a preception of percentage compared to actual net subcribers numbers being added. about 5 years ago they were adding less then a 100,000 a quarter and now they are adding 400,000 a quarter. Sure if you add 100,000 to 100,000 it works out to 100% growth in a quarter, but most would agree it is better to be adding 400,000 then 100,000 subcribers.
The fact is the kind of growth they have experienced was because of the money they put into content and would have never happened if they did not. While I will agree mistakes have been made it was a totally new bussiness model for radio and were to be expected. People are not going to pay 12.95 a month for commercial free music and some no name host on talk. Content is and will always be king, something Mel knows all to well. Like you said fixed cost were only 150 million and they were getting nowere fast and did not and would not have had the growth you were expecting at that time.
I just cant see how anynone would have invested in these two companies back then (about 5 years ago)as anything more then a gamble. I personally am a gambler. I think you are wrong to say you fore-saw a better future for them back then then there is now. As a matter of fact there will only be one direct competitor again and this time there are no other DIRECT competitors coming in for the foreseeable future. Cost will be cut dramatically, althought not overnite it will happen.
>>>>>>>> Hippo, What I dont get about your whole churn aspect, is if that is the case it would be your position that they not get so many subcribers because that is going to lead to more loss of subcribers in the end due to churn. If that is your position it is a outrageous one.
If churn cannot be brought down, and they haven’t done very well at bringing it down thus far, it becomes increasingly difficult to add net subscribers because so many are lost to churn. Eventually, a steady-state is reached where losses are precisely offset by net adds and you cannot grow subscribers beyond that level.
When churn is at 1%, it is manageable. But when churn is at 1.8% (S/P), the business becomes untenable. I had always thought they would be able to control churn better, but I was wrong.
>>>> I just cant see how anynone would have invested in these two companies back then (about 5 years ago)as anything more then a gamble. I personally am a gambler. I think you are wrong to say you fore-saw a better future for them back then then there is now.
You have to be kidding. Five years ago, we were expecting standard equipment installs, across the board, by now. We were expecting fixed costs to stay fixed. We were expecting churn to remain at a reasonable level, and while it was anticipated that the conversion rate would drop some, it has dropped more than I, at least, expected. Some smart people believe it could get to 40%. The so-called competition you’ve all claimed is taking such a toll was nonexistent. Do you think it is going away just because of a merger? (In fact, because the quality of the merged service will suffer, sat radio as a whole is apt to LOSE customers to other services).
Five years ago satellite radio was a totally different story, and one with a much brighter future. When Stern came onboard at Sirius, it changed everything — because Clayton threw the baby out with the bathwater — committing Sirius to a program that effectively insured they could not become profitable in the foreseeable future. Yet, XM had to raise the ante to keep its content advantage, and they did.
Was a gamble then? HELL YES. I bought most of my XM shares when it dipped below $2/share before the refinancing. I sold most of them at something like 15, most of that was rolled into call options that I traded all the way up to 40. Now, I was able to bail a lot of money out along the way, but knew at any point that I could be killed with a precipitous drop, and I was.
Is satellite radio a bigger risk now? Absolutely. Today, you’re totally gambling on a pop as a result of merger approval, which may or may not come. After the merger is approved, it will be YEARS, if ever, before the merged company can conceivably turn a profit.
Five years ago, given competent managements at both companies, profitability was within reach — but SIRI rolled the dice on Stern, which was an absolute disaster, not only for Sirius, but for XM as well. It did serve to keep Sirius afloat (since customers prepay) — but it also doomed them to failure down the road.
There was a time, maybe in ’04 (Dobie would probably remember it) when I felt certain Sirius was past the risk of bankruptcy. Today, I think bankruptcy is a long way off, but the risk of Sirius shareholders losing it all? Pretty high — probably 25-50%. I would not have put them in that category at any time beyond one year past their financing, I don’t believe.
Hippo, the reason churn is at, what it is at, is they have made a descisive decision to make growth there number one priority something they clearly were not doing back then. With the numbers we are talking about being added, what you get mixed in are people that try it and leave. That churn will be high as long as the growth stays at where it is and the companies keep going after it. For example if they said we are not going after making all OEMs standard equipment that we are only going after the Luxury OEMs then churn would be vary low. The problem is you would not get the people that are willing to stay on at the domestic level and would not have close to the level of growth you have seen are are seeing.
How can you say you expected standard equipment installs across the board back then they were putting out 2 and 3 year projections and they were nowhere near that level of installs at even the 3 year projection. As for fix cost after the next year you should have known those were going up because they did. If you expected churn to remain as it was you could not also expected the kind of growth you were expecting. I have never said nor have I ever believed things like the Ipod were direct competition to satellite radio even when making the arguement for the merger. It has always been, free versus pay. That content will be the main stay of ether bussiness. That satelites main competition is the price people are willing to pay for content.
Now how you can say they had a much brighter future before Stern is unbelievable. he was the spring board for both companies into the main stream. They both enjoyed major net subcriber adds from that point on. For you to say it was a mistake for SIRI, shows that you are just mad because XMSR up to that point had a major advantage over SIRI. That was the turning point for them. Stern got them 900,000 subcribers before he even gave his first show. In two quarters he gave them 1.5 million subcribers. You only have to look back SIRI up to that point was only getting 100,000 a quarter. As proof the bonuses, I can say with certainty were only given if the subcribers Stern got for them, made it a vary profitable deal for SIRI well over what Stern got from his salery plus bonuses.
No, as I have said I would totally disagree it was more of a gamble back then then now things are much more clear then they were. I would say that as for a pop up, yes I am hoping for one there because I have bought back 5,000 shares at 2.6 just for that but the main shares are long for the 3 or 4 year take, unless it does a DISH before that.
>>>> For example if they said we are not going after making all OEMs standard equipment that we are only going after the Luxury OEMs then churn would be vary low.
I referred solely to self-paying churn. I do not consider OEM promo churn to be in the same category as self-paying.
>>> How can you say you expected standard equipment installs across the board back then they were putting out 2 and 3 year projections and they were nowhere near that level of installs at even the 3 year projection.
This time in 2003, I fully expected stronger OEM commitments by this time — and I wasn’t the only one. XM’s OEM partners (GM/Honda) were showing a lot of strength in their commitments and I fully expected the others to have jumped onboard by now. That’s not to say I expected MY’08 cars to ALL be OEM installs; but that we would at least see that level of commitment out of all of them. As it now stands, Toyota has been a real laggard, and even Nissan, which is a very strong XM/OEM partner at this point, is just now rolling out large numbers. The fact that all Infinitis are now XM standard is suggestive of a direction, but until they actually do it is of marginal value.
>>>> Now how you can say they had a much brighter future before Stern is unbelievable. he was the spring board for both companies into the main stream. They both enjoyed major net subcriber adds from that point on. For you to say it was a mistake for SIRI, shows that you are just mad because XMSR up to that point had a major advantage over SIRI.
Stern has been an absolute disaster for Sirius. They foolishly hired Stern at a time when selling a receiver (for Sirius) was a very expensive proposition — this is why in the two years following Stern’s hire they lost 2 billion dollars, in spite of adding all those subscribers. SIRI is now trying to negotiate Stern’s price down, but he has them by the shorthairs — if they don’t come across with the money, he can easily take his audience elsewhere, and very well may. It was a costly mistake, a rather obvious one, and one which will take a toll into the future.
It is a fact that Stern led to XM’s self-destruction, but XM’s management was just as responsible for it.
I know this is an unpopular opinion, but one need only look at the P&Ls since Stern was hired to see what a horrendous mistake it was.
The mistake YOU are making is to assume that subscribers are a good thing. If you’re losing money on them, they are not. The Stern publicity was great for Sirius, but if they cannot monetize it, and sit there continuing to lose money for the next 5 years, it is hard to say that Stern was a net positive for them.
Sirius very likely would have been better off to continue growing at a subdued pace until they got costs under control. Of course, they were panicking because they had already gone nuts to get NFL and that brought NOTHING in the way of subscribers, as many of us predicted. Nothing they were doing was working right under Clayton, largely because he was a total idiot. Stern is one more example.
You may have noticed that Mel, who was so hot to renew Stern’s contract at his current compensation (yeah, right), is now trying to negotiate him down. Now, perhaps he can, but it is highly likely they will either (a) Lose him, or (b) overpay him for the next term.
Bummer of a deal.
I was taking about self-paying also. My point is that the people that get a domestic may find the 12.95 to much of a cost for what they are getting after they have started paying, where if a person is buying a luxury car they could care less about the 12.95 a month for the service. It is the reason why a down turn in the economy would effect the churn at both levels. People dont realize the cost until they are paying it.
Well at least you can admit it was unrealistic for you to say back then you could see all OEMs being standard by now.
I will agree if they could have delayed Stern a few years it would have been better. You however are assuming once again that was a possibility. I disagree contracts were up and XMSR was also seeking to sign him at that time. XMSR messed up by not getting him becuase if they had, SIRI might have at this time be a foot note. As to do I think Mel is happy to have Stern on his play list, yes I do. Do I think Mel is trying to cut his pay, yes I do, That is Mel’s nature. If they got Stern for 2 dollars a year, Mel would say that was to much and be trying to pay him 1.80, Every media executive does it, Mel is just better at it then the rest.
For people to say Stern was over paid is to say, SIRI started with 500 million and bonuses and Stern just agreed. SIRI paid him what they had to to get him away from XMSR, and Viacom. Next contract will be different, Stern has said he would never go back to terrestrial radio, there will only be one satellite company, Internet radio is in no position to offer him what he his getting now. I do believe he may still get a face saving raise of 4 million extra a year, but he will not get anymore bonuses. he will have to make that up in shared advertising revenue LOL.
>>>> Well at least you can admit it was unrealistic for you to say back then you could see all OEMs being standard by now.
I didn’t say that. I said I didn’t expect we would be seeing the installs across the board by now, but I fully expected stronger commitments to standard equipment installs by now. At the time I think it was totally realistic.
>>>> I will agree if they could have delayed Stern a few years it would have been better. You however are assuming once again that was a possibility. I disagree contracts were up and XMSR was also seeking to sign him at that time.
XM was not about to pay that kind of money. Not even close, not even half. There was no danger of XM taking him at that payrate.
>>>> XMSR messed up by not getting him becuase if they had, SIRI might have at this time be a foot note.
I think your confusion comes from the “subs at any cost” mentality — which is precisely what brought Sirius down and forced them into the merger.
Had XM acquired stern, it would have simply increased the amount of money they lost over the last 3 years just as has happened with Sirius. There is, however, one key difference — when Sirius hired Stern, their SACs were sky-high, while XM’s were reasonably controlled. So, Stern coming to XM would not have generated the huge losses that he brought Sirius. But it was still a bad business deal and would have been for XM, as well.
Had Stern gone to XM, Sirius would have benefited from the exposure but would not have been burdened with the increased fixed costs and might have done fairly well. It would have killed XM’s model.
But you really cannot easily draw these comparisons because XM is pretty much focused on its OEM business, and Stern is an inherently retail phenomenon. The key reason XM is a stronger company is that its OEM relationships are stronger and over time, apt to yield more subscribers.
From a practical perspective, they’re both dead meat unless the merger is killed, which seems unlikely at this point. With the merger, XM’s prospects are totally dragged down by SIRI’s problems.
Excuse me Hippo but you have got to scroll up to see what you said in your comments before sense you cant seem to remember (your words verbatim “You have to be kidding, five years ago we were expecting standard equipment installs, across the board, by now). As a matter of fact you just prove my original point again. You must have been the only one, OEMs at the time were not saying it, and analyst were not saying that. You had to have been making a way out of the ballpark projection on that one. As I have said even the 3 year estimations were not even close to that kind of penetration. Compare that, to now on the other hand which it does not take a huge leap to think that in a few years they will be standard.
Hippo, get real, how do you think it got that high. It is not realistic to think that kind of figure just come out of the blue. It sure was not Viacom there last contract with him did not even come close to it. Besides that who are you kidding look what they paid Oprea for no excluesive contract, and nowhere near the show time. Take the amount of airtime XMSR gets out of her, she works out to be more expensive (they got HARPO int. not Oprea
Subs at any cost! Your whole contention; that we dont want a lot of subcribers right now because the radios cost us to much is ridiculous. You basically say SIRI should have said screw growth we dont want that, it cost us to much. That has to be it because taken the amount of subcriber fees collected from subs Stern got, SIRI made out big time.
If XMSR would have gotten Stern, SIRI would have been a second class radio company just trying to stay a float. XMSR would be close to pulling in a profit. They would not have spent more then half of the money it would have cost them for Stern on dumb ass deals that got them no real returns, just to try and keep up with the Stern effect.
As to your feeling that XMSR is the better of the two that is just your and a few other peoples opinion. I will go by the market cap, THERE IS A REASON SIRI HAS THE LARGER ONE. If more people felt the way you did XMSR would have the larger market cap.
You can try and say that XMSR is the better of the two because they have the better of the two in OEM deals all you want. The fact is, that it is content, that makes SIRI the better of the two. Fact is XMSR has always had the majority of the OEM deals, yet have not been able to take the lead in net subcriber adds in 10 consecutive qaurters. What a quintessence it just so happens to be the same time Stern came to SIRI.
Unless you can admit what you said before was wrong, and get more realistic on your opinions (ie. what XMSR did or did not offer Stern which you have no proof except your opinion which has to be more realistic). I am not going to bother with commenting on this again.
>>>> Subs at any cost! Your whole contention; that we dont want a lot of subcribers right now because the radios cost us to much is ridiculous. You basically say SIRI should have said screw growth we dont want that, it cost us to much. That has to be it because taken the amount of subcriber fees collected from subs Stern got, SIRI made out big time.
If Sirius made out “big time”, why is the deficit in retained earnings bigger today than it was the day Stern was hired, and bigger than it was (at the time) projected to be as of now?
And why is Mel now backing off of his previous statement as to signing Howard again at the same pay rate?
Sirius will clearly not break even on the Stern deal over its five year life span. Now, that is acceptable if the cost is reasonable and the other benefits are substantial. But in the Stern case, the cost was not reasonable and the company has lost more money as a result of hiring Stern than they would have without him.
One could argue that SIRI received a ton of benefit in the way of brand recognition. But is that, in fact, valuable, if the principle means of selling receivers is through OEM installs? The car you get has XM or SIRI preinstalled and you subscribe to the service that is there or you don’t subscribe at all. So the brand value is nominal at this point.
Had they paid $250M (instead of 3x that amount) for Stern, I would have made the same argument, but I would have been proven wrong. But at 3/4 billion, it was a stupid deal that can never be profitable (which is the reason Mel is now trying to negotiate Stern down for the renewal).
>>> The fact is, that it is content, that makes SIRI the better of the two.
Okay, well, you’re entitled to your opinion — but it is important to remember it is YOUR opinion and it may not be consistent with the facts. Sirius spent 3/4 billion on Stern, and still, once you adjust the subscriber #s to put them on a comparative basis, has gained maybe a half million subs on XM over the period since Stern was hired. Since SIRI was starting at nearly nothing, you would have expected them to gain some anyway.
Most of the people I know believe XM’s content is far better, but that will differ depending on who is doing the listening. There certainly is no evidence to support the claim, and it isn’t something we’re going to resolve at this late date.
>> I am not going to bother with commenting on this again.
That would be fine with me.
You as I have said before have major inferiority complex, you cant even admit you were wrong when I put up exactly what you wrote. You also cant do mathematics 2.3 million subs (at least) X 10.05 ARPU X 12 = 277 million a year – 142 million (Sterns pay per year) = 135 million a year the deal yields SIRI in net revenue from that deal, Plus ad revenue they would have never gotten without him. As for Mel I can say you must not be a success story, because I guess you would go into negotiations with somebody telling them I am willing to give you more. Only a Jackass would not be able to see that. You also are so blinded you cant see simple logic SIRI was getting killed by XMSR in subcribers prior to Stern. They then went from that, to beating them. How dumb can a person be, not to see that simple fact. I will end this with what evey analyst says of SIRI and XMSR when giving a analysis of each quarterly report, LOSSES NARROW DUE TO GREATER SUBCRIBER ADDITIONS.
>>>>>>You also cant do mathematics 2.3 million subs (at least) X 10.05 ARPU X 12 = 277 million a year – 142 million (Sterns pay per year) = 135 million a year the deal yields SIRI in net revenue from that deal, Plus ad revenue they would have never gotten without him.
Sirius posted its biggest quarter to date in Q4 after Stern was hired. In the ensuing year, growth was huge for Sirius. In the year following that, growth continued at levels beyond where even I thought they would. Yet, during the two years plus 1 quarter (’07, ’06, Q4’05) they managed to report losses of $2.5 Billion.
Prior to Stern’s hiring, anaylsts were projecting $500M/y tops.
If Stern has been such a great influence on SIRI’s financial situation, can you please explain this?
Now, the reason you are wrong is that (a) you have conveniently forgotten the other variable costs of providing the service to the Stern subscribers — a problem any second year accounting student could handle with ease, and (b) you sort of overstated the “Stern Effect” — his listenership is in the area of 1.2 Million listeners. Apparently, you think the other expenditures (e.g., NFL, expensive OEM deals) did absolutely NOTHING for subscriber growth.
Obviously, you are totally out of your league in trying to put numbers on what has happened since Stern arrived. I recommend you take your own advice and don’t speak on this subject any further.
Your a moron, if you think people are going to believe half truths or just the part of the story you want to put out. You have been proven wrong on this in prior post by me and many others and I am not going to explain it to you again. If you are that dumb and can’t remember then scroll up here and go back through other articles. I am not going over it all again.
>>> if you think people are going to believe half truths or just the part of the story you want to put out.
I don’t care whether anyone believes or agrees with me. But nothing I’ve said is properly classified as a “half truth”.
I asked you to account for the 2.5 Billion in losses SIRI has reported since the day Stern was signed, and this is how you reply? Who is posting “half truths”?
Now, you can argue all day long about how Stern improved SIRI’s revenue, and nobody, including me, will argue with you. But revenue is only part of the picture, and you cannot be excited about revenue increases when expense increases exceed the revenue increase. This is high school bookkeeping, yet you seem to have a difficult time with it.
At this point, given SIRI’s significant decline in growth, recoupment of the losses generated by adding Stern when they did looks to be highly unlikely. So, what did they gain? Brand recognition? A lot of good that does when you aren’t selling receivers at retail.
Now, you can bash me all you want. But you cannot argue with the facts. If you believe I’m not stating the facts, please explain in detail where I’m wrong. But namecalling is just a cop out. You would be better off just not responding, if you’re trying to convince someone of something.
If selling a receiver is costing you $150 (or more, as most of the Stern subs did) and a sub only last 40 months, it is exceptionally difficult to recoup the cost of the receiver, the cost of Stern, and the other variable costs to provide the service before the sub churns out. And it is even more difficult to make a significant contribution to fixed costs. Your “mathematics” conveniently ignored the costs to provide the service and to provide a receiver. Who is telling “half truths”?