Sirius XM Release 5 year Guidance – Negotiating Refinancing Of Debt
As anticipated here on SiriusBuzz Sirius XM radio came out with a press release today on the Q3 reporting. The company will issue their quarterly report Monday, November 10, 2008, and will host a conference call the same day at 4:30 PM.
Perhaps more important than the guidance provided by Sirius XM Radio is the reason that the guidance was issued. The company states, “The company is in discussions with several financial institutions regarding a financing to replace its 2-1/2% Convertible Notes due 2009. In connection with these discussions, the company is releasing the material elements of its five-year operational and financial forecast.”
Refinancing of the debt has been a huge weight on the stock ever since the financial market collapse two months ago, and any news that a successful refinancing is happening could serve as a boost to the price per share.
Among the news was the release of guidance for the next five years.
| 2009E | 2010E | 2011E | 2012E | 2013E | |
| Subscribers | 20.6 | 22.1 | 24.0 | 26.2 | 28.4 |
| Revenue | $2.7 | $3.0 | $3.4 | $3.8 | $4.1 |
| Adjusted EBITDA* | $0.3 | $0.6 | $0.9 | $1.3 | $1.5 |
| Free Cash Flow | $0.0 | $0.4 | $0.6 | $1.0 | $1.4 |
In the past Mel Karmazin has always maintained conservative guidance. Under Promise and Over Deliver has been the track record. Time will tell how aggressive or conservative this guidance is. There is little doubt that a weak OEM channel has had, and will have an impact on this company, as this is the method by which most subscribers are derived.
Position: Long SIRI
There are two forum threads that may have the answer, so if someone could keep an eye out and transpose to here, I’d like to know:
Is it good, bad or pretty much expected from previous reports?
It’s Alive!
Finally . . . Mel speaks. So far so good . . . I like what I see. I like that discussions with the banks are continuing.
Lets see what Monday brings . . in line with guidance will be fine for me.
The 5 year projection and business plan tells the story. the numbers are good, could be better with the auto sales, but still good. He is going to get the financing.
This is really good news.The stock should move up.
Now if he would re-tract the RS and issue of more shares, the stock would adjust accordling.
imho
vaporgold
vaporgold
Tyler or anyone – Nothing in this release mentioned anything about positive earnings per share. I see the EBITDA and other figures but nothing about EPS unless I missed it. Can someone tell me when we are expected to have positive EPS?
Thanks.
Why is all this good news…. they are simply complying with SEC regulations and reporting what appears to be 1.5 Mil net subs for 2009 and 2010, no profits and a meek 300M and 600M EBITDA.
I’ve included the releases note hear:
*Adjusted EBITDA is net income / (loss) from operations plus equity expense and depreciation and amortization expense. Free cash flow is derived from net change in cash and cash equivalents plus cash flow from financing activities and other investment activity. Adjusted EBITDA and Free Cash Flow are non-GAAP financial measures. A reconciliation of these non-GAAP financial measures to their most comparable financial measure calculated and presented in accordance with GAAP is attached to this press release. The projections shown above do not give effect to any adjustments that may occur in respect of the valuation of XM’s assets and liabilities acquired in the merger. Any such adjustments could materially affect certain of these projections.
I always love when the details of the numbers are attached to the press release but not reported.
In reading the results on Market Watch, well down the page, there is a paragraph stating the…
…….. although we are in discussions with several financial institutions regarding a possible financing to replace its 2-1/2% Convertible Notes, as agreement for such financing may not be achieved or if achieved may not be achieved on favorable terms….
This is separated from the initial announcement, stating that they are in discussions with financial institutions regarding this debt. I think most investors want to hear exactly how this debt will be financed, not that they are still having discussions. The discussion that investors need to hear is How? and When? and at What Cost?
Aside from that, I think the third quarter numbers will be negative, which is not a surprise. We know that the 1 time merger and acquisition costs will be broken out and losses will be reported with and without these one time costs. The sub numbers are going to be the bigger problem. Nineteen Million and change is not the upside surprise we were looking for but at least it shows growth. I would not be surprised to see third quarter subs at a Net Negative which will shock investors if this happens.
Monday will be the real test and how the pps reacts to it all.
COS or anyone…
can you explain why this stock trades so many shares daily…and the pps seems flat?
Pre-Market Trade Reporting
Pre-Market
Last: $ .3047
Pre-Market
High: $ .32
Pre-Market
Volume: 2,076,204
Pre-Market
Low: $ .26
who is doing all the buying or selling?
Money managers who have large positions and equity bond holders who have been lent large amounts of shares for the purpose of shorting the stock. IMO
The manipulation of price is not illegal when done with borrowed shares in hand. They have so much control of the price that they can move the stock price down slowly without ever losing the opportunity to buy and sell to the retail investor. Possessing a million shares can create huge road blocks at each 1 cent level. If you have access to Level ll trading and a “Book Viewer” that records trades you can see what I am talking about.
For instance in checking level ll at 11:32am there is a block of 250K shares at .27 without any block at that time at .28. That tells me that their trying to move the SP to over .28 where they will relocate their 250-300K block of shares too. Don’t know if it helps but they have been consistent at doing this for weeks.
thanks COS..
i don’t have level II. why do they want to manipulate the pps…are they setting up to go long on good news?
or are they setting up to short the stocke even lower?
SiriusHope
I would only be guessing, but if they can get the stock price back to .31 or .33 by the end of the day tomorrow, I would say they were setting retail investors up for another short run down to the low .20’s high teens after the earnings call. Remember that there isn’t anything to report after Monday. Even if it goes up a little, they will make money over next week by taking it down again… We have to remember their making money all the time by doing this and I believe that is their motive….. IMHO
By the way once their done taking it down, I also think they will hang long until the stock gets back to .39 – .45. They are playing on retail investor HOPE and making money while they do it. I am trying to buy stock on their coat tails and sell at the same time. I can’t beat them so I am trying to “draft” their activity. Hoping to build shares and cash at the same time. I sold all my shares at .41 and stated then I would buy back after the call at .21. So far I have not changed my plan. I am disappointed that financing of Feb 09 debt is still being discussed. I have reset one buy for 15K shares at .19. All the other lots are already set below that, and I will adjust them on Monday-Thursday accordingly. It is not a fun game but as with most, I have lost a lot of money and am trying to recoup in this way. I hope that helps ….. Good luck.
COS…yes and thanks for your help and insight…i sold last week 7600 @.36 and bought back 11,100 for the same amount invested therefore increasing share amount not value.
maybe if it goes up to .40 i will sell off again and wait for it to drop into the low 20’s again. will see after monday – wednesday what pps levels are.
seems this is the only way to build up share amount w/o losing additional value until it really pops in 2009.
Good luck with all your day trading. I hate that it’s come to this.
Rebuilding positions is our best chance to recover vs. keeping it lost there forever.
You look at the growth. The revenue stream. In this economy any growth should be considered positive.
Cos, you may be right about the debt disclaimer. Or it may just be another legaleze wording placed by law.
I still say they get the debt refinanced. And if they do it with a loan vs. more dilution we will move higher.
Tyler, you have your finger on the pulse. Nice call regarding the announcements today. Appreciate your efforts.
The stock is at .27. And they say car sales are hurting siri/xm. Oh really. It’s already built into the price.
Had we gotten this news on an up day we would be moving higher.
Debt covered without dilution = huge positive.
Brad, ditto. My strategy is less attention intensive. I’m watching for bottom (knowning that timing it is virtually impossible). I have kept big powder dry waiting to buy enough to push my average share price well south of $1. At best we are still in a crap shoot.
socal…..
I do think that the disclaimer is legaleze but, needs to be considered at this time. The company has already issued shares to remove 50M of Feb debt and is asking for more shares from shareholders to further dilute. Thinking that this debt will be done from bank financing is a stretch, IMO, especially with bank facilities due to expire in May 09, for 350M. Dilution of equity to pay off debt seems to be the preferred option, as has already been exercised.
Cos. I agree with you post regarding debt being eliminated by dilution having been done.
I just think that the company is under intense investor scrutiny right now. That it is choosing it’s words very carefully.
And at some point when they issue press releases stating that they are involved in talks with several people to eliminate their Feb 21/2’s with a bank loan. They have to be believed.
They have made many mistakes. However, their numbers in this economy represent a “growth” company.
I couldn’t be more disappointed with what’s happened to the pps.
I myself have sold at .53 and bought back in at several points, not looking for a bottem. But hoping for some positives regarding the debt.
Let’s face it. The shorts rule every penny up or down in this equity. Just like Tyler said. But if you take away the “fear” of the Feb debt. Things can change in a hurry.
And I think they would want the price to go back over a dollar, eliminating the need for RS etc.
IMHO.
Off topic. How these genius’s expect the housing market to recover when fixed rates are at 6.50, I have no idea.
Did you see that the S&P maintained it’s buy rating on Sirius today.
The S&P is a tough sell. That’s a solid rating. The shorts need to go find some other poor stock bastard to gang up on……………
Does anyone know the details on how this game the shorts are playing works? When does it end? And does it go the other way? There should be some other past example out there that we could get some insight from?
Gs getting hammered today. Hopefully Weinkes got his pink slip………..
“underpromise and over diliver”????
I think that is an optomistic interpritation. SIRI has lowered its sub guidence three times this year (2.5M, 2M and now 1.6 or so). That is not consitant with underpromising and over delivering. It is declining growth.
I am not blaming the company. They are hardly alone in that. I am saying that anyone who interprits this as underpromising and over delivering is being an optomist.
SIRI-LONG
good question…hope we can get some intelligent answer for your question.
we were up .03 earlier today and now just under .01 near the close and over 48 million traded…very puzzling daily event.
The number of stocks that are victims of so-called naked shorting has plummeted several-fold in recent weeks.
Data published by the Nasdaq stock exchange, for example, show just 56 stocks on its naked short selling watch list this week, compared with almost 500 at the start of the SEC’s ban on naked short selling a list of 1,000 stocks.
anyone know where can we find out if we were on the list?
2,778,945 shares was last trade and caused the stock to drop from up t at .28 to .26…What the fuck goes on last trades everyday so big and destructive.
Who would trade that many shares at close?
SiriusHope
http://www.nasdaqtrader.com/Tr.....OThreshold
SIRI is not on the list – but that doesn’t necessarily mean we’re not being manipulated by strategic FTDs.
I think they are last minute margin calls. It wasn’t just us. The volume for the DOW jumped at the last minute too.
thanks WIN and JON
COS you had it right until last trade today.
Earlier you recall you told me….
That tells me that their trying to move the SP to over .28 where they will relocate their 250-300K block of shares too.
Hope,
Buyins.net does a nice job with the naked shorting lists.
Why do we get manipulated?
I actually once thought that someone hated H.Stern, so much, that they made it their lifes ambition to take the company down………..
Think he’s pissed anyone off enough for that to happen?????????
after just 20 minutes after hours to day look at this…look at the shares.
After Hours Trade Reporting
After Hours
Last: $ .28
After Hours
High: $ .288
After Hours
Volume: 1,816,963
After Hours
Low: $ .26
SOCAL
I really dont have an opinion why we get manipulated. It happens everyday at last few trades.
Hope,
M.Hartleib thought he was on to a company that a lot of manipulation was going through.
However, we are still be manipulated.
I honestly believe, based on the report that shows highest shorted companies list. Us being number 2. That many expert short traders take advantage of companies that have large negative or no positive earnings.
But in addition. MSFT, has been shorted for years. Why? I have no idea. It has lots of cash etc. Yet it still appears on the list.
Hedge funds and short traders have had a great time of it this year. And without a big upswing in the economy they will continue to rule.
I tried shorting lvlt two days ago when it hit 1.40. Unfortunately I have a 401k. So I need a margin account.
Why not join them for a while. They appear to be making a lot of money.
i found this post…make any sense?
This will be the first SIRI Conference Call I can remember to be held after hours rather than in the morning. I think there are two possible explanations….. Common wisdom has always been that you reveal good news in the morning, to affect trading, and delay bad news until after hours. That doesn’t seem to fit this time since earnings will be revealed in the morning, revenue and EBITDA guidance is holding up, and slowing sub growth has already been disclosed….. The other, and perhaps more likely explanation is that something significant is scheduled for Monday and SIRI wants to command attention when they make the announcement. Could that be refinancing, particular after the strange timing of the announcement of projections?
I’m clinging to the hope that Mel is setting a trap for shortie. New financing should do the trick.
Great Strategy by the CEO?
The shorties will start thinking tonite!
SO CAL
Thanks but no thanks…i dont short stocks..that is just against my grain to try and damage a company just to make $$$.
siriushope,
I was pretty much on the price all day… I don’t know where those last trades come from. My guess is it’s like closing the register at the end of the day…. margins calls and day traders closing out their positions and holding cash over night. If you go on level ll in the morning at 9:20 you;ll see them open their register with 100 share bids at .01 and right up to opening their positions tighten and share amounts get real.
Hope
I have taken you point of view with shorting much to my financial demise.
I would however, have no problem cashing in on a nice short of GS.
Thanks COS