The Best Of Both Worlds
A few days ago, I touched on the fact that the much touted 4oo million dollars in synergies was a low ball figure. In an interview on CNBC today, Citi analyst Tony Wible agreed with me that the estimates are in fact conservative.
You may not have noticed it, but Tony makes a good point in the interview. He points out that auto sales have been declining for the last four years, yet Sirius (and Xm) managed to grow over the same period. I am now questioning why it is the street insists on tying satellite radio sales, with auto sales. It’s obviously a failed indicator.
Now that I have that out of my system, I had a thought regarding the synergies. We have all heard of the cost cutting benefits and the improved ad sales that may come. For a moment, I’d like to think outside of the box. After listening to Mel’s interviews today, it seems to me the company is less concerned with what will happen and is much more focused on what can be done immediately to improve its balance sheet.
Sirius Xm has a pool of nearly 20 million potential new subscribers that can be gained in this quarter in the form of former subscribers! At first you may think it impossible. I beg to differ. How many people canceled their XM service when Nascar moved to Sirius? How many GM owners would like Howard or the NFL? How many Ford owners would like Opie & Anthony, or Major League Baseball? With the best of both Sirius and XM coming soon, this is an obvious company resource.
A marketing campaign directed at this immense pool of potential subscribers through advertising, mailings and telemarketing could reap huge rewards. There are so many benefits to the merger that we can only begin to imagine the possibilities. Subscribers could potentially double in a single quarter. Now that won’t happen because Grandma is probably not going to pay for satellite radio for the 35 minutes she spends in the car each week.
Yet the resource exists, and unlike the outer shelf and Anwar, there is nothing stopping us from tapping it. Additional “re-subs” together with increased penetration would knock Wall Street naysayers on their rears, and it it could be implemented right NOW. The road to profitability may prove to be paved, ironically, with years of lost subscribers.
Position: Long Sirius.
Brandon your 100 % correct I have one Sirius sub now, and will be reactivating my 2 Chevy cars when I can have both. for a total of 3 This will be huge.
Tyler – Having 100500 shares before the merger I strongly agree with ypu that opportunities for future growth exisit. However, I feel that shareholders must have on their mines the threat of SIRI XM RADIO filing for bankrupty in order to fully capture this potentail growth and erase their enormous debt. It seems to be the only thing stopping siri from making a profit. What are your thoughts as I am starting to waiver about keeping my shares.
Good points Brandon. A lot of writers/analysts do not know the details. I think the merger has many waiting. I have Sirius and just bought a used car with XM. I was waiting to get the best of both before activating. I am confused about the coming options. Will the NFL, or any premium program, be transmitted on both systems? They need to clarify the direction quickly so that people can decide how to go.
I’m listening to the replay of the Opie and Anthony interview..
Mel just said its about putting content on each that can’t be replicated…
Its about 35 minutes in…
Could some shed some guidance on this.
I recently heard conversation that satellite radio isn’t a radio company but a technology company with a radio station.
The point was that Sirius XM Radio have assets with tremendous untapped potential.
First, human resources. Their team of technicians are industry leaders. Second, the potential to utilize spare capacity for other opportunities is quite feasible. I has heard talk in the past about aviation navigation systems. The system currently used is “inferior to the automobile navigation systems”.
And, what about the potential for various defense contracts?
They obviously have excess capacity given their bandwidth and spectrum.
Can somebody write about this, if it is in fact a viable possibility?
I just have a hard time believe Sirius XM Radio is solely pursuing Satellite Radio and TV, given the capabilities of their tremendous talent and proprietary networks, which are now combined under the roof of one company.
Lastly, what will happen with Sirus and XM’s vehicle navigation services?
Any further elaborations of possibilities are welcome!
not Tyler….I don’t want to give you investment advice. I do feel the potential exists, although its remote.
If the company continues with strong growth and the merger benefits pan out, the liklihood of a BK scenario dissipates quickly. Profitablility affords the luxury of refinancing at better terms and paying off debt completely.
On the other hand, weakness in the next 2 quarters would be a clear indicator of trouble. This is what I beleive everyone will be watching.
I agree Brandon. Another way to monetize the former subscriber list would be to offer 4-6 ad-supported channels. All 35-40 million deactivated satellite radios would start playing these 4-6 channels of ad-supported, digital quality music. Beats ad-supported music from terrestrial radio that can cut out from one town to the next. Ad-revenue…promotional tool…What do you guys think?
They have the $ to operate, even Mel said on CNBC “no need to raise new capital given this last round of financing.” Also, Mel is not a “bankrupcy is our best option” kind of a manager.
I don’t like that idea because you end up eating your own market. There is incentive then to not pay for service and just get the ad stations. However, those stations can be run cheap, no djs, central location. Basically, one guy in a room programming 4-6 stations. But ultimately I don’t think it’s a good idea.
The fact that Mel didn’t announce an iphone app today IS CRIMINAL.
The iphone has been out for a year. Steve Jobs provided the code to software developers almost a year ago. The code is so simple developers wrote programs in less than a week for it.
AND MEL and his team has not released a program yet? All we have is an illegal hack called “uSirius”. If some pimple faced teenager can write a program that works on the iphone…WHY THE FUCK DIDN’T MEL HAVE THIS READY???
His interviews today were FUCKING FLUFF. NO FUCKING EXCITEMENT.
I find this UNFORGIVABLE! Imagine if today he said what he said, but added….oh yeah…we’re rolling out a program for the iphone this week. It’ll be available on the itunes app store.
And they pay Mel 32 million a year??? He’s had nearly 2 years to get ready for this….and nothing.
At least with the FCC we had a enemy we could hate. Mel what the FUCK ARE YOU DOING????
“He’s had nearly 2 years to get ready for
Did you listen to the O & A interview. Yesterday was the first day he even stepped foot in xm because the FCC wouldn’t allow any business between the 2 companies….
He still should of had a program ready. XM already said they had one.
He should have made an announcement about it.
COME on Brandon. EVEN the mere MENTION by Mel today that they WERE going to roll out an app for the iphone would have been a GREAT soundbite.
Admit it. Its all about buzz. With all the doubt surrounding the details of this merger and of future uncertainty after 19 months of uncertainty….Dont you THINK the simple mention of an iphone app would have BEEN HUGE????
You KNOW they are going to do it. So WHY NOT SAY THAT???
As an investor who has been repeatedly used as a punching bag….it’s missed opportunities like this I find UNFORGIVABLE.
I don’t care if it was the FIRST day. WEVE BEEN WAITING FOR almost 2 years for news. NOW IS THE TIME TO EXCITE PEOPLE. Especially in leu of the negative buzz around the issuing of millions of shares to short to our enemies.
I mean come on. The reason why the shorts ruled while in merger limbo was because Mel couldn’t say anything.
Now He can. And that is WHY EVERY DAY counts. Set the tone. Set the mood. GET SOME EXCITEMENT going.
By not doing that…he left the door open for the bashers to continue their work.
It is not hard to write an app for the iphone. Companies crank em out in a week. Even if it was next month…mentioning it today WOULD HAVE BEEN A HUGE HELP.
This stock should not be languishing. It’s called PR….Mel needs to do better than his performance today…otherwise it will feel like the merger never happened and the bashers are still in control.
I am an ANGRY PISSED OFF MUTHA FUCKING LONG….theres a difference. I WANT TO SHAKE MANAGEMENT AWAKE….BECAUSE if we don’t strike now….we will lose. I DONT WANT TO FUCKING LOSE MY MONEY ANY MORE.
Realist, I hear you and maybe 6 channels are too many. Perhaps 2 or 3 channels. The point is there will always be a large population of die hard non-subscribers and that number will keep growing. Even when satellite radios become ubiquitous, there will be tens of millions perhaps hundreds of millions of “dead” satellite radios. And that’s a lot of earballs to pass on.
Did you happen to catch the interview on Stern today? In it lies a clue to a potential revenue source of over 400 million dollars per year…I didn’t think so. For 4.00 extra per month, Xm subscribers will be able to get Howard Stern…
Yes. I heard it. But speaking to howard stern fans about it is not enough.
We need a BARAGE of positive soundbites. We need him mentioning the soon to be released iphone app….to counter balance all the wrong negative buzz about the effect of car sales slowdown. We need him to mention more specifics. We need MORE…and NOW.
i agree—There has to be one hell of an awareness marketing campaign, an aggressive marketing to the receivers that arent activated and tech breaking new products (like the Apple phone category)–Its probably too late for this years Xmas season but 2009 should be watershed—Plus lets see some really good things in Best Buy, Circuit City, Walmart etc—Gotta get real aggressive here
i agree 100%—There has to be one hell of an awareness marketing campaign, an aggressive marketing to the receivers that arent activated and tech breaking new products (like the Apple phone category)–Its probably too late for this years Xmas season but 2009 should be watershed—Plus lets see some really good things in Best Buy, Circuit City, Walmart etc—Gotta get real aggressive here
2009? fuck. i am so pissed at myself for buying this at $6.50.
Even after averaging down to around $4….I was willing to get out at $3 after the merger pop.
When it dropped to $1.50….I was like THAT IS FUCKING IT!!!
So now we are going to be enticed by more false pie in the sky promises. Articles will come out like they did when we were at the $2.50 level that say….WHAT A STEAL! THERE IS NO WAY THIS GOES LOWER! GREAT RISK REWARD BUY MORE NOW!”
I’m already reading this same shit about the $1.50 level. WHAT A BARGAIN. BUY MORE NOW!
And i have to admit…it sucks on that gambler mentality. You think…HOLY SHIT. I’ll be smart. I’ll average down even MORE now at $1.50 and get out at the SMALLEST FUCKING POP.
The thing is EVERYONE is thinking the same thing. And so you are stuck after buying more at $1.50….because WHAT DO YOU KNOW….something HAPPENS. A downgrade? A bad article? WHO THE FUCK KNOWS.
But suddenly the pps is down to $1….and your GREAT IDEA isn’t looking so great anymore.
THAT IS WHEN THE DAGGER IS PLUNGED. Mel announces a 1 and 5 REVERSE SPLIT.
You suddenly have 5 TIMES LESS SHARES. But you think…OK…at least its a zero sum game…I STILL have the same VALUE now that the stock is at $5.
BUT WHAT HAPPENS NEXT??? OH SHIT….MASSIVE SELLING!!! And suddenly the stock is at $2.50….and you have lost EVEN MORE MONEY.
OH…and then comes the FINAL insult. Mel declares Bankrupcy. WHAT LITTLE SHARES YOU HAVE LEFT ARE COMPLETELY WIPED OUT. ANd you think…WHAT THE FUCK HAPPENED.
I am just creating a VIVID picture people. I am not a short. I am a LONG LIKE YOU….who is SCARED….that we will be screwed ONCE MORE like we have been repeatedly with this stock.
I think it’s IMPORTANT to get this view from a fellow long. We all feel frustrated, battle fatigued and used.
Yet we won’t leave the gambling table. We read articles promising NOW is the TIME for us longs! FORGET ALL THOSE OTHER TIMES WE SAID IT WAS THE TIME….NO! NOW…NOW IS REALLY THE TIME.
And like lambs to the slaughter we blindly follow.
I think its so so important to be guarded now more than ever. I am FUCKING PISSED OFF….and I want to KEEP myself on edge. I want to shake people from their merger haze and say HEY! DON’T BELIEVE THE HYPE! Or At least QUESTION it. THis isthe LAST OF YOUR MONEY.
Liam – I agree with you 100%
Is it me or did an article about reverse split disappear. Not that I care because I’d rather the stock stay at 1.50 with 3 billion shares than do a 1 for 4 with 750 million shares and then drop.
reverse split article here…
under the investors tab.
I’m sure people felt the same way about amazon stock at one point.
Basically i feel like a walking cautionary tale.
That little voice in my head that has screamed for me to sell so many times in the past is working over time now. And for the FIRST time, I am actually listening to it.
EVERY other time I heard the voice, but then dismissed it. Partly out of pride and partly because of all the PROMISES of the merger shoved in my face. I BELIEVED the hype.
I averaged down from $6.50 to $4…in one dollar increments…and i VIVIDLY remember after each time…saying…OK….get out on the slightest pop….ONLY to not sell because i wasn’t at break even or above.
With each drop the amount I was WILLING to sell for got lower and lower. Finally towards the end I just wanted out. Yeah…me and 5 MILLION OTHER PEOPLE.
So right before the merger when the price was in the mid 2s…I was hoping for $4….but secretly willing to settle for $3. I KNEW everyone else was hoping for $5….but had the feeling ALOT of people were scheming like me to get out quick.
And like FUCKING CLOCKWORK…as if on cue…it starts to run up….but it never quite reaches $3. Like it ACTUALLY KNEW WHAT I WAS PLANNING.
But I figured like EVERYONE that after the merger we’d get SOME SORT OF POP. While others dreamed of $5….I was getting ready for $3….
And we all know what happened. IT FUCKING DROPS TO $1.50 after MEL the BACK STABBING KARMAZIN makes a deal with the enemy to sell shares short.
He couldn’t even WAIT to give us longs the satisfaction of a small pop.
I look back now at the last 18 months as the biggest waste of my life. Like Quint in the movie Jaws…I’ll NEVER PUT ON A LIFE JACKET AGAIN…I’ll NEVER EVER CLING TO HOPE like I did about the MERGER.
Now we are in the 1s…and talk is circulating about reverse splits and bankrupcy. It is enough to drive you insane.
Now EVERYONE and their mother just wants out of this stock. I think Mel KNEW that…and is the REASON why he struck the deal with the devil to set the price at $1.50….to lock us in.
Now we will be fed promise after promise to keep us in.
But the bars to our cage are our own fear and anxiety about losing money.
I’m beginning to think that my true freedom is to just get out. TAKE MY $$$$ loss and use what I have left to put in one of the other stocks I’ve been dying to invest in but was stuck in Sirius all this time.
It is amazing that over the last 3 years EVERY one of the other stocks in my list have gone up….quadrupled in some cases. Doubled and tripled in all the others. But heres the kicker. Over the last few years they have done so MANY MANY TIMES. I would have been in and out as they doubled and tripled and back in others. It boggles the mind at how much money i could have made. And my list of stocks is only around 10…and they ALL did this….while Sirius….has only gone down.
And you all know the few times it popped….the pop LITERALLY lasted less than a few minutes. LOL. I am fucking serious.
THe pop in NOVEMBER. and the pop in March.
I remember I was glued to my computer screen in March….like I’ve been for the last year….and my 6 year old niece came over and asked for me to play in the snow outside. I said ok…but only for a half an hour. And in that time the stock popped and dropped back down.
THAT is the insanity of this stock and why finally…I think I’ve had it. I am a true long….but I’ve got such a bad feeling from the past history of this stock that I see only bad things.
I was willing to get out at $3 before….but do I buy even MORE now at $1.50 so I can get out at $2 for the same amount? Or do I just not risk anymore cash and get out at $2 or the first move up?
It always seems that just when I COMMIT to a target price the pps plummets and I have to re-evaluate.
Liam…SELL! Don’t let the door hit you in the ass…
Number 1. You screwed up buying at 7.00. If you had consulted with a professional you would have been told to wait until it bottomed.
2. Problem number 2. You were never investing in the company. You were looking for a quick buck….gambling…and you lost. You continue to revisit the track on borrowed money looking for that big win.
3. I happen to believe that we have seen the worst. The mistake people make when self investing is buying on emotion. They buy high and sell low.
4. This tells me you are smarter than most people….because you have not succumbed to the emotion. You know in your heart this is a big thing. It just hasn’t happened in the time frame of OUR liking.
5. You could cut and run, and rebuild. No one would blame you…or you could reevaluate the situation. Check your emotions, do your homework, and make a decision.
First of all I averaged down…so in essence I bought at $3.80. I am sure ALOT more people are stuck in at higher prices.
If you think expecting more than $3.80 is being an amateur then you are an asshole.
Let me guess…you’re a genius who NEVER bought until just yesterday when the price was $1.50.
He led longs to believe certain things about Sirius and the merger. Those things didn’t include the jail rape he executed upon merger approval. He has a duty to disclose information so investors can make informed decisions about the stock. He kept plans about settling XMs debt private, later claiming he was under some sort of “radio silence.” That was absolute bullshet. He could have, and should have, disclosed that information. Instead, he allocated revenue to pay ridiculous bonuses rather than retaining it to settle XM’s debt. He knew all along that he was going to use approval news to sell a boat load of stock, taking the anticipated pop away from longs who patiently suffered through the approval process.
I blame Mel for specifically failing to disclose his intent to dilute shares upon approval of the merger to settle XM debt. Spin it if you want, Mel jail raped longs though a series of misleading conference call statements.
Why don’t you give it a rest. How many times have you posted today? 20, 30, 40? Your ranting is getting absolutely absurd. On one of your posts you claim (in all capital letters) that you NEED
Why don’t you give it a rest. How many times have you posted today? 20, 30, 40? Your ranting is getting absolutely absurd. On one of your posts you claim (in all capital letters) that you “NEED THE MONEY”; then in your post above you brag of being in 10 stocks, some of which have tripled and quadrupled for you. I was feeling sorry for you before; I empathized with you. Now, I question your motives. Now, according to you, everyone is being cheated and everyone wants to get out NOW! You, on the one hand, gave off the impression of being an astute investor. Then, now, on the other, you accuse Mel of acting fraudulently. There is not a person reading this board who has not gotten your point. It is immaterial that I disagree with you 100%. What is material is that your ranting is getting old and tiresome.
Fuck that…I’m with you Liam. The whole thing is bullshit.
No…I WOULD HAVE BEEN IN 10 OTHER STOCKS….IF…I wasn’t stuck in Sirius.
I have a list of 10 stocks I have been researching….and EVERY one of them did what i said.
If only i wasn’t stuck in the stock from hell….my life would be different.
I agree that XM content and Siri content needs to be cross/sold to each others subs. For instance, I would buy NFL in a heartbeat for 5 bucks/month. A ton of siri subs would buy MLB for 7 bucks a month during the summer. Parents could buy 7-8 kids channels/disney for 3.99 month. I still think a porn package would work (20 bucks a month)– Husler talk dirty channel? Imagine. Penthouse stories channel? S and M channel? With all of the spectrum available, there are a lot of directions and ways to bring in revenue. I think Stern and Sports are where you start and you market it agressively and big time to current subs to get cash rolling in. During X-mas, NFL and NBA is a great thing. I personally listen to a ton of college football on my XM–Pac 10 and Big 10 (Could care less about the SEC).
I’m just going to say this. I have NO doubt, that there are big new things on the horizon. Mel made a statement that he hadn’t had any dealings with XM prior to the merger. Why not?
Because the FCC forbade it. If it were to come out that siri and xm were doing deals behind the scenes, large fines could ensue, up to license revocation.
Being smarter than the average CEO, I’m sure Mel is in a position in which the last thing he he wants to do is give any appearance of wrong-doing by making announcements of deals that would normally take weeks or months to accomplish, in a single day.
A little more patience….
I’m with Liam, this is all one long shit song.
I have Sirius and listen to it as much as possible. Since I spend a large amount of time in my car and traffic can suck, it’s the thing that saves me most of the time. I invested in this stock much higher and can’t stand the fact that I’ve wiped out much of my IRA that I had spent so long building. I do have faith in the company at face value but some of the things I’ve been hearing regarding their debt and reverse-splits, etc. has me a little concerned. Let’s hope that Mel gets this thing rolling in a positive way soon. It was a let-down when I heard that the technologies don’t mix and that we now have to wait until possibly October to be able to listen to XM channels. Let’s get a compatible 2 way radio going now and get all of the channels going.
A lot of peole write what Mel should be doing. To those of you, how do yo know he is not doing what you think he should be doing. The people who are true long Sirius shareholders are COUNTING on Mel. If you are DOUBTING Mel, sell your shares. WHY would you own a stock where your doubt its leadership.
What about an add where it is the IPOD talking to the SIRIUSXM guy like PC and MAC commercials. I have lots of ideas for that. And what sportsman out in his boat or way out in the country, now while he is out hunting or fishing would not also want to also listen to his favorite sports team!! I know some wifes that might buy that radio just so they can have their TV back on Sundays.
Has anyone gone to http://www.siriusxm.com I think that will be the web page, it has been coming up blank now since Monday since I been watching it…but soon very soon.
This STOCK is going to ROCK!! 3(yes)-2(no) = 1 GREAT COMPANY
Let the DOG DANCE !!
Just listened to your show, guys. Great job! I think you should send recordings of the show to Mel and also investor relations at Sirius and XM. Most companies spend an arm and a nut trying to get some of the information and ideas you guys are willing to discuss for free.
What about pay-per-listen for live events: concerts,wrestling,boxing and UFC….similar to pay-per-view on cable?