Sirius XM: Buy, Sell or Hold?
After reviewing the latest reports from Merrill Lynch and Goldman Sachs, the only apparent fact in this sea of uncertainty is that one will be right, and one will be wrong. True, Goldman has been correct thus far, yet everyone knows past performance is no indication of future results.
In what appears to me to be an ironic twist, Merrill has become a lot less bullish while Goldman has become a little less bearish. In Merrill Lynch’s latest report, a lot of attention is now being paid to the 2009 debt issues that are approaching. Citing the worst credit market in decades, Merrill’s report is full of potential negative impacts should Sirius not be able to achieve its refinancing goals which include everything from diluting possibilities to shareholders being potentially wiped out in WAMU fashion. Merrill again reiterates that they do not see this scenario as likely.
I found the Goldman report much more interesting however. For starters, they lowered their target to .50. On a percentage basis, that doesn’t present much downside risk relative to their recent downgrades, although that does not include further dilution or the total loss of shareholder equity. They cite key risks as “faster-than-expected merger integration and financial outperformance.” Key risks? Those sound like risks to short-sellers and not shareholders.
Both reports seem to give much more attention to the May 2009 loan, and both seem to concede that the February 2009 converts are not a major hurdle anymore.
My take on this is to hold for now. The Senate today passed the 25 billion dollar auto loan bill. This should free up money for the oem’s to use elsewhere, including the potential for the issuance of lines of credit to Sirius XM. Every dollar that can be deferred by such a plan could be used to eliminate the debt problems. The pending government plan to restore the credit markets should be approved by Monday as well.
As for the key risks cited above by Goldman, faster-than-expected merger integration is certainly plausible. In fact it seems the company has done little else thus far this quarter. Financial outperformance seems highly unlikely, unless the company can execute on its “best of” programming packages. XM subscribers potentially joining Sirius for Howard Stern and the NFL can certainly lead to increases in revenue, and those 20 million nonsubscribed radios already on the roads may see new life as GM owners reactivate the service to get the content available to them on Sirius. This won’t become reality unfortunately, until a full quarter of the combined services can be effected.
Can anyone tell me why the stock fell 12% on Friday…I thought the beatings were over? Blah Blah Blah…..so much bullshit on these threads it makes my head spin. The stock blows and we all should have sold our shares around 3.61…waited for the beatings and we could have had the same position at .68-.70c a share. Anyone make that move? No! The koolaid on this company is laced my friends. I am sick of the bs about how the stock is down because of: shorts, naked shorts, downgrades,GS,Wienke, the post from Tyler, Brandon, Mels remarks at the confrences…the list goes on. Its all speculative bs from a bunch of koolaid drinkers. The facts are in, we got hosed folks. 17 months..no pop..the exchange was garbage, the blame game began and down goes the stock. Following this stock and these threads has been my biggest waste of time over the past few months. Everyone needs to understand the market is a gamble and the gentlemen on the other side of the table are brighter than you. In this macro environment I really have no advise where to put your money, neither does anyone else for that matter.
Long Siri, Long STeelers
spanyo, count me in to and i’m sure we have other. that’s what we need something that is positive. KEEP IT ROLLING
Ben, low volume
Sirius IS going to be a cinderella story. I almost wish I had kids so that I could tell my grandkids the story of how I almost thought I was going to lose all my money on this crazy satellite radio stock… And then it made me enough money to quit my day job. But if I had kids I couldn’t afford to buy as much stock as I have and am still going to buy.
Maybe if we could just get a letter written to Mel. Stressing important concerns, signed by as many shareholders possible at the very least it would send a message to Mel, that he has a loyal base or shareholders, but more importantly we want change. (Sorry I sound like a politician) bottom line it wouldn’t hurt to make a statement of some sort.
Matt, we need to have a shareholder meeting soon and let Mel know in person.
spanyo if you made a mil or 2 why quite your job???? it’s fun to work and make money.
That would be great,
count me in also..for at least $1,000.U.S….great idea…Thanks Brandon,Tyler,Newman,etc
Kevin, I will match
Kevin,we have raised 2,700.00 today new loan balance is 297,300.00 on the Feb, 2009 loan. Not bad for today
I have 25 cents left after buying SIRI these past few years – I’ll contribute! (Actually, I have about a buck and a half left, but I did not want to brag.)
Steve, please sell your 2 shares
What, not my two shares?
I’d rather spend my days playing/recording drums and taking guitar lessons. Although, I would probably have some kind of job just for the healthcare. I refuse to pay full premiums for something I rarely use. I admit it would be interesting to have a job with FU money!
spanyo-
On a Sunday night, before going to work Monday – in the financial world such as the U.S. finds itself in now – what a fantasy to be able to take music lessons and have the leisure time to play music of one’s liking! Thanks for making me smile!
Brandon. My sincere thanks for by far and away the most exact posts I have ever read here or on any board!
OK. I’m in that’s all I know. Let’s see what Brandon can drum up. Thanks to all. Great posts. When I read some of the posts above, and Brandons great ideas, I really really really wonder who’s running this Sirius boat.
OK, First of all it is like there is not anyone except me and a few others that believes or heard Mel when he says the Feb. converts will be taken care of using cash on hand and a bank loan. So lets put the first amount in prospective it is really more like 150 million that needs a loan in Feb. Second it is common sense that GS wants a reconvert of their old ones. My god who wouldn’t, they get a better strick price and a better interest rate. Mel has basically said that is what GS wants and that is not what he is wanting to do. So that debt is not even a issue. It may have worse terms in the end then Mel would like if Mels hand is forced. It should have never been a issue of a chance they would go bankrupt on.
Matt, No I am not concerned at all. I have given many examples (goto the forums and Seeking Alpha I am 163888) as to why the financing is not a issue of the reason for going bankrupt. Most of it is common sense and logical thinking. As you said there has not been promotion of the new stuff. Well first of all, most of the new stuff is not avaible till Oct. 6th, so why advertise something that is not out yet, especially when they are trying to cut cost well advertising is a place to start. At least do it when it will have the most effect.
Brandon, with all due respect what you guys are talking about it smacks of desperation. I also think it does nothing but get people overly worried about a nonissue (bankrutpcy over financing in 2009). Second GS I will not even get into about how wrong they have been on their projections. They may have got the PPS right but that was about the only thing. go back and look at their sub projections and the ARPU and the SAC they have almost been consistantly wrong to the low side. As for SIRI doing it on there SEC filings you know as well as I do, first they are required to if there is even the slightest possiblity. Second it is the same thing they did in 2003 when they had to do there restructuring and refinancing and they are still here, are they not. As to the interest that directly reflects the current credit crisis. Now even you have to know that by the time SIRIXM does their financing, the government will have something done even if this bill does not pass.
Dave
Give Mel time?
We have all seen the pps drop for months on end now. My question to you is what will the stock price be at the end of Oct, Nov, Dec with no loan?
.50 .25 .10 ?
If it continues at the same rate of the last three months, we will probably be negative.
I don’t think we that kind of time Dave.
If the stock was holding at 1.50 2.00 or 3.00 we would not be having this conversation.
Mel had 17 months to line up financing for the XM purchase…that did not go to well did it?
I don’t trust anybody anymore
imho
This is turning into a great board, I enjoy reading all the posts.
vaporgold
As I said earlier, I’d be in for a $1000 if this thing starts rolling. Hey, a grand to save a hundred grand…..Sign me up please!
OK
I had posted a plan like this about three weeks ago.
I also contacted Sirius XM and got a quick response.
I suggested that if the share holders got this done that we wanted a guarantee that the company would not go private nor file BKR.
All of the longs should be there for the ride.
Dear William,
Thank you for contacting SIRIUS Customer Care! We appreciate the time you have taken to email us regarding the donations. We are here to
help!
William, we appreciate the suggestions of the donation towards SIRIUS!
We are forwarding your suggestions to the appropriate team for them to
review. If you would like to discuss this matter even further, we
recommend that your contact the address on our FAQS page on our website.
Have a wonderful day, William!
We are committed to providing you with the best in customer care. If
you have any more questions, please feel free to contact SIRIUS Customer
Care. For your convenience, we are available 7 days a week at:
1-888-539-SIRIUS (7474)
As well as by email at:
http://www.sirius.com/customercare
And you can always manage your account 24/7 by visiting our website at:
http://www.sirius.com
Sincerely,
Renee C
SIRIUS Customer Care
Did you know that SIRIUS has great money-saving billing options?
This seems to be a generated response. I was hoping that Brandon or Tyler might have the means to get the message through to Sirius and the share holders.
I am all for Investors stepping in.
I think we should act now.
Once the idea generates positive reaction then call the Media with our Idea. That would back Mel into a corner and send the market a strong message.
I called it ” Shareholders Revolution”
I thought with a name like that Howard would jump onboard to get the word out to Subscribers and Shareholders.
Your right OK This should not die.
It’s a great idea and we should act on this to protect a product we love and our investment.
I had hoped 3 weeks back that the idea would take hold.
I glad to see our SIRIUSBUZZ writers taking notice.
Thinking out of the box might be our only hope.
Fuck the Banks we do not need them for the financing we can make this happen.
Best Regards,
WJD
Also Brandon can you have an artical on this with a poll ?
WJD, This is GR8. I bet if the banks find out that they will miss out on this opportunity. I bet other company will fellow in the near future.
At this point I prefer the shareholder bailout plan to get the guarantee that the company would not go private nor file BKRPT.
I feel all the gray hairs over the past 19 month’s does not compensate the longs if the company is sold less then a hamburger cheap. We should be along for the ride NOT pushed aside.
I hope that Brandon can pump this idea and NOT let it die.
No GOV Bailout today
We need to save our SIRI now
Thats not a big surprise its all political now.
I haven’t had a chance to read all of the responses, but I myself had questioned the thoughts of shareholders and subscribers coming together to help bail out a great company that got the shaft from the FCC and now getting the cold shoulder from Wall Street. I would certainly contribute to a debt liquidation fund and as a shareholder of 60k shares even consider purchasing debt at a much more favorable rate than SIRIUS XM could find on the street. A couple thoughts….(1) SIRI should send out to their subscribers a phamplet explaining the debt liquidation fund, asking for contributions and how this will help
SIRIUS XM and benefit subscribers….(2) Find the web masters(internet gurus) who created the Ron Paul internet campaigns that generated tens of millions, if not hundreds, and ask for their help. They love a good fight against the establishment and they would certainly fell this is a worthy cause. I bet if SIRIUS XM found some airtime for Ron Pauls “Liberty Campaign”, they would have a comapign up for SIRIUS XM in no time. This kind of stuff on the internet takes a life of its own….(3) Hasn’t Howard Stern been pretty vocal about the merger delay and the effect its had the company’s future. I’m sure he would support a “debt liquidation fund” and promote it to all of his listners and ask them to contribute. I’m sure there are plenty of creative ideas that will produce substantial results. If shareholders and subscribers want it bad enough, they will make it happen. Like I say count me in.
Randy