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Yes, 50ma, not 200ma, my mistake! :)
I see buying potential here at NOK.. having eastunder on the board only adds to my confidence! :)
unfortunately, no.. but i have no plans to buy any penny stocks ever again, so it has nothing to do with PCFG, its technicals or fundamentals.. just my personal preference to stay away from the penny game..
glad i sold at "euphoria" at .08 a year ago.. a penny stock will always be a penny stock and eventually show its true colors..
really sad to see what is happening here to lots of good people ive enjoyed conversing with.. i sincerely hope for the best for everyone, i really want this thing to correct for you guys..
So true east, 20ma has been solid for a support bounce on this stock time and time again. I'm thinking it will be between 2.25 and 2.30 by the time it makes it's way back down there on consolidation, at which point I will load up again. I sold off everything at 2.50 into the run on Wednesday.
GLTA!
I dont have Level 2 open but it looks like 10m shares were bought around 10:53 today at $2.25
nowhammynowhammynowhammynowhammy!!!
Saw this article, I echo this sentiment.
I don't think Liberty put in this much time, and tied up this much capital, with SIRI to slash and burn it's assets.
Nice push at the end to close at $2.04 :)
I would really love it if we could close above $2 today...
Sirius XM: Bracing For Monday
seekingalpha.com/article/648751-sirius-xm-bracing-for-monday
By: Little Apple
For the last few months Sirius XM Satellite Radio (SIRI) has been on a steady decline. Many feel that it is due to the uncertainty revolving around the Liberty Media (LMCA) takeover attempts that began in March. However, the 52 week high of $2.41 occurred on April 2 which disputes that idea, since the first actual concrete evidence of a Liberty takeover was reported on March 29.
Last week most of the articles written about Sirius XM were extremely bearish. It is one thing to recognize that we are possibly entering a bear market due to Europe's constant "Doom and Gloom", but to say that a stock is dwindling due to "questionable fundamentals" is begging for a bull attack:
"The smart thing to do here would be to sell the stock before it succumbs to more bearish pressure in a market poised to punish anything with questionable fundamentals. For that matter, it seems $1.65 is likely the next target."
I think most analysts will disagree with the fact that Sirius has questionable fundamentals. As a matter of fact, the company had a record breaking first quarter. According to Yahoo Financial, 13 analysts give Sirius a mean target of $2.59, with a high of $3.20:
Price Target Summary
Mean Target: 2.59
Median Target: 2.60
High Target: 3.20
Low Target: 2.00
No. of Brokers: 13
The low target of $2.00 was given by the one analyst that rates Sirius as Underperform. However, he doesn't even say to sell. Actually not one professional analyst that I could find says to sell. Most of the analysts here recommend buying it (as of this month), and 4 of the 13 think it is a strong buy. Fundamentally not a lot has changed in the last three months according to this:
Recommendation Trends
Current Month Last Month Two Months Ago Three Months Ago
Strong Buy 4 4 4 4
Buy 5 6 6 6
Hold 4 3 3 3
Underperform 1 1 1 1
Sell 0 0 0 0
Top Institutional Holders
Holder Shares % Out Value* Reported
UBS AG 233,415,325 6.14 539,189,400 Mar 30, 2012
WELLINGTON MANAGEMENT COMPANY, LLC 205,500,161 5.41 374,010,293 Dec 30, 2011
VANGUARD GROUP, INC. (THE) 169,915,413 4.47 392,504,604 Mar 30, 2012
S.A.C. CAPITAL ADVISORS, LLC 98,267,455 2.59 226,997,821 Mar 30, 2012
BlackRock Institutional Trust Company, N.A. 89,181,833 2.35 206,010,034 Mar 30, 2012
TPG-AXON CAPITAL MANAGEMENT LP 88,350,000 2.32 204,088,500 Mar 30, 2012
Blue Ridge Capital LLC 61,990,000 1.63 143,196,900 Mar 30, 2012
Coatue Management, LLC 57,829,793 1.52 133,586,821 Mar 30, 2012
STATE STREET CORPORATION 57,048,957 1.50 131,783,090 Mar 30, 2012
SCOUT CAPITAL MANAGEMENT LLC 56,000,000 1.47 129,360,000 Mar 30, 2012
Top Mutual Fund Holders
Holder Shares % Out Value* Reported
VANGUARD MID-CAP INDEX FUND 44,804,134 1.18 81,543,523 Dec 30, 2011
VANGUARD TOTAL STOCK MARKET INDEX FUND 44,756,333 1.18 81,456,526 Dec 30, 2011
Powershares Exhg Traded Fd Tr-Powershares QQQ Tr, Series 1 44,511,194 1.17 102,820,858 Mar 30, 2012
VANGUARD EXTENDED MARKET INDEX FUND 26,453,160 0.70 48,144,751 Dec 30, 2011
HARTFORD CAPITAL APPRECIATION HLS FUND, INC. 23,366,330 0.61 48,601,966 Jan 30, 2012
HARTFORD CAPITAL APPRECIATION FUND 22,874,900 0.60 52,841,019 Mar 30, 2012
FIDELITY CONTRAFUND INC 16,056,018 0.42 37,089,401 Mar 30, 2012
VANGUARD GROWTH INDEX FUND 12,790,583 0.34 23,278,861 Dec 30, 2011
COLLEGE RETIREMENT EQUITIES FUND-STOCK ACCOUNT 12,378,556 0.33 22,528,971 Dec 30, 2011
FIDELITY OTC PORTFOLIO 11,628,284 0.31 26,861,336 Mar 30, 2012
Summary Judgement in Favor of Sirius XM in Shenk Case
http://siriusbuzz.com/summary-judgement-in-favor-of-sirius-xm-in-shenk-case.php
June 7, 2012 (8:00 am) Spencer
Sirius XM (NASDAQ:SIRI) is on a winning streak of sorts when it comes to lawsuits. In a preliminary ruling published on May 31st, Judge Rakoff found in favor of the defense and granted a summary judgement. The decision has not yet had its written reasons published, but in essence the Shenk matter is now closed. Appeals, similar to what is happening in the Blessing suit, may arise in the coming weeks.
The Shenk lawsuit was a class action suit on behalf of investors that carried the possible implications of “unwinding the merger” between Sirius and XM. Even if the lawsuit had been ruled in favor of Shenk, the likelihood of the merger being undone was remote. With this victory under its belt, Sirius XM can continue to move forward with the business of providing satellite and Internet radio to consumers.
The major legal issues with Sirius XM at this point are:
- The appeal in the Blessing suit. A Class Action on behalf of subscribers
- The appeal of the Howard Stern suit, an issue in which Stern seeks hundreds of millions of dollars he feels are due to him.
- The Sirius XM suit vs. Sound Exchange, where the satellite radio provider alleges that the music royalty collection service interfered with Sirius XM’s ability to negotiate direct deals with record labels.
- A potential appeal on the Shenk suit.
With most legal matter against them in the rear view mirror, Sirius XM can move forward with matters such as Liberty Media and the FCC.
Slowing Auto Sales No Worry For Sirius XM
by Spencer Osborne
http://seekingalpha.com/article/637251-slowing-auto-sales-no-worry-for-sirius-xm?source=email_rt_article_readmore&ifp=0
Despite the fact that May 2012 auto sales came in below expectations and delivered the lowest Seasonally Adjusted Annualized rate (SAAR) of the year, Sirius XM has little to worry about. While the headlines will deliver mixed reviews of auto sales, it is the numbers that dictate whether Sirius XM is ahead of or behind the curve.
Throughout 2012 the auto sector has been above an annualized rate of 14 million. The pace was moving so well in the first quarter that many analysts began to up the expectations for the year to 14.3 million from 14 million. This has been a stellar year in auto sales and Sirius XM has benefited in a big way.
April of 2012 delivered the first hints that the auto channel was cooling off slightly and now May has confirmed it. Analysts were expecting auto sales to come in at an impressive 1.4 million for May. The actual number was 1.33 million. The mixed bag of how this news is digested comes from the overhang from the disaster in Japan last year. The year over year comparisons look great, but the month over month are less impressive. Looking at SAAR, the 13.8 million demonstrates the fact that the pace has slowed a bit.
Now, with all of that considered, what does all of this mean for Sirius XM (NASDAQ:SIRI)? The simple answer is that things are fine this quarter and there is little danger of the subscriber guidance being in jeopardy.
As many regular readers know, I divide the auto sector into three distinct categories based on how each category delivers subscribers to Sirius XM. The "Leading" category (depicted in green) delivers subscribers at the time of production. The "Point-of-Sale" category (depicted in yellow) delivers subscribers when a vehicle is sold. Lastly, the "Trailing" category (depicted in blue) delivers subscribers only if the consumer elects to become self-paying.
What we can see trending is that the "Trailing category is slowly taking share away from the "Leading" and "Point-of-Sale" categories. In a perfect world we would like to see a balance between these categories. Having a balance provides a smooth flow of subscribers and deactivated subscribers.
From a Sirius XM investors standpoint the key issue here is expectations vs. what is delivered. Last year I wrote a few articles indicating that the ability for Sirius XM to meet their overall guidance of 1.6 million would be a challenge. Ultimately the company delivered 1.7 million subscribers and naive investors were quick to say that I was flawed in my assessment of the situation. Savvy investors looked deeper into what I actually stated and saw the issues right away when the company reported numbers. Deactivated subscribers were lower than they should have been and the company went negative in Average Revenue per user (ARPU). Those that read my thoughts more carefully saw that this was exactly what I was warning about. I never called for a miss, but did say that if the company hit the guidance it would come at the expense of other metrics. That is EXACTLY what happened. For those that doubt this, I challenge you to go back and read what I wrote:
In Sirius XM Will Find Adding Subscribers More of A Challenge I noted:
"While churn remained stable at 1.9%, the deactivations were 187,000 more this year than last. The lesson is that flat churn on a percentage basis sounds good, but because the base grows, the real number increases. It is important that the company deliver a higher gross number to offset the deactivations."
In my article November Auto Sales Make It A Challenge For Sirius XM To Meet Subscriber Guidance, I spelled out why challenges existed and how the company might overcome them. In that piece I actually warned of some of the dynamics that would be negative should the company meet guidance stating:
"So what does Sirius XM need to do to pull off 442,000 subscribers in Q4?
1. Bring churn down to about 1.75%
2. Be aggressive on conversion and get that number up to 45.5% or better.
3. Push the retail channel - They need to get the Lynx on the market ASAP.
4. Offer up some great consumer deals.
5. Get the used car market ramped up ASAP."
The November auto sales article was not popular with many long term Sirius XM investors. I followed it up with more detail as the month of December progressed. In Finalized Novemeber Auto SalesFigures Confirm Sirius XM Concern, I reiterated:
As stated before, the company is very capable of hitting their subscriber guidance. They simply need to hit on all cylinders, including:
Stronger December sales that hit at least 1.15 million
Reduce churn to a level near 1.75%
Increase take rate to at least 45.5%
Get the Lynx unit out in retail or at least promote the Edge unit
Work on retention stronger than usual (could impact ARPU)
The point was not a prediction that the company would miss, but rather a concern over what the company would need to do to get to the number they needed. When Sirius XM announced that they beat 2011 subscriber guidance by 100,000 units people celebrated that fact. A few weeks later we were able to see how it happened. Retention efforts were substantial and actually drove the ARPU metric down by 5 cents instead of seeing it rise.
This is why managed expectations and even a negative opinion of May auto sales may be very important for Sirius XM. Sirius XM investors were over-excited about getting to 1.7 million subscribers in 2011. A few short weeks later investors saw the COST of getting to 1.7 million, and then the company issued 2012 guidance of only 1.3 million subscribers. This is the roller coaster that long term investors want to avoid.
When Sirius XM revised subscriber guidance for 2012 to 1.5 million from the low-ball 1.3 million it was very warranted. If May 2012 sales had come in at 1.4 million, there could be an impression that Sirius XM would need to raise guidance again. That would have been bad. Now that sales are lower the company finally has a chance to manage the expectation level. Sirius XM will leave guidance alone and has every reason to because of the perceived slower pace. This is very good for this equity.
The most difficult thing Sirius XM faces in 2012 is expectations that are too lofty. The stock has typically been trading at a premium, and more recently has been punished for trading at that premium. The May auto sales reality check is just what Sirius XM needed.
The key point to understand is that sales were high enough for the company to deliver good numbers, but low enough to keep expectations in check. Savvy investors will know how to play this and seek out buying opportunities.
Disclosure: I am long SIRI.
More gloom and doom, more exaggeration and selective research, and more assumptions that reach pretty far, IMO.
Also, regarding the statement at the end, "It doesn't hurt that the company has somehow truly figured out how to monetize the mobile space, which is to be admired." I don't know if the author is aware but SIRI has a really, really nice mobile app. My girlfriend and I have always had issues with the Pandora app (signal going in and out, uses a lot of battery, takes a long time to boot up), and my experience with the SIRI app on my droid has been exponentially more enjoyable.
More Bad News For Sirius XM, 2 Alternatives
http://seekingalpha.com/article/636401-more-bad-news-for-sirius-xm-2-alternatives?source=email_rt_article_readmore&ifp=0
Earlier this year, we had a favorable opinion of Sirius XM Radio Inc. (SIRI). Today we struggle to find a legitimate reason to buy the stock. Interestingly, investors seem so caught up with the whole Liberty Media (LMCA) situation that it is possible that potential issues with the core business have gone unnoticed.
While everyone seems laser-focused on the jobs numbers last week, the very disappointing new U.S. auto sales for May 2012 seem to have passed everyone by. One of the reasons we were high on SIRI earlier in the year was the fact that U.S. auto sales were trending much better than expected. In fact, the SAAR (Seasonally Adjusted Annual Rate) of car sales, which tends to be adjusted monthly, rose from 14.2M vehicles in January in 2012, to 15.1M vehicles in February, before declining to roughly 14.4M in both March and April. However, the SAAR for May was a disappointing 13.8M vehicles, which was 4.8% lower than expected and an 8.6% drop from the February high. Moreover, the poor jobs numbers, lousy stock market, and general economic concerns may weigh on consumers in the near term, negatively impacting car sales.
Clearly, many of SIRI's fortunes are tied to auto sales and the subsequent subscription conversion rates. As a result, much has been written regarding the record 10.8 year average age of the U.S. automobile on the road as a real driver of new car sales, along with the greater availability of financing options, even for those with poor credit histories. Plus, management has done an admirable job in extending the reach of its target market via its penetration of the pre-owned car sales market with franchised new car dealerships. Nonetheless, we are cautious regarding its true prospects.
For example, while the number of pre-owned vehicles sold each year is roughly triple that of the new car market, a great many of the buyers of those vehicles are not likely favorable subscriber candidates for Sirius XM. The average price tag for these vehicles remains in the $8,000+ range and most of these buyers are cost and budget conscious.
Additionally, based upon data we derived from the U.S. Department of Transportation and NIADA (National Independent Automobile Dealers Association) publications, it appears that the majority of pre-owned vehicles are sold by private parties and independent dealers, followed by the franchised and specialty dealerships. Thus, the actual opportunity may be a challenging one in terms of both total prospects and the conversion rate. At most new car dealerships, despite the higher profitability, pre-owned vehicle sales still tend to be materially lower in absolute number than new vehicles.
Since 2009, which was the recent bottom for both new auto sales and SIRI's subscriber rates, car sales rose from 10.55M units sold to 12.8M units sold in 2011, a 21.3% rise. During the same timeframe, SIRI's subscriber base rose from 18.8M to 21.9M, a 16.5% increase. While we do not believe that SIRI is even close to market saturation, anything but a greater than 10% rise in new car sales and material pre-owned car sales conversion/penetration make for a tough market. Moreover, lower gas prices, while a bonus for consumers, can be a double edged sword here. Prospective new car buyers may delay trading in their ancient gas guzzlers for new vehicles equipped with SIRI systems, negatively impacting the SAAR.
On top of our auto industry and subscriber conversion concerns, this Liberty Media mess has got to have had an effect on management, which did not need the headache. Much has been written and speculated on this front so there is no need for a re-hash of the same material. All investors need to know is that since Liberty made its moves and increased its ownership stake by 15%, the stock has declined by nearly 20%. With no resolution around the corner, we can only expect this issue to continue to weigh on the stock.
Interestingly, there are two attractive stocks that could be real alternatives to SIRI.
Even if auto sales do not exhibit spectacular growth this year, one of the major drivers of the market is the availability of financing to a segment that used to be termed as sub-prime auto purchasers. Consumer Portfolio Services, Inc. (CPSS) is a specialty finance company that serves as an indirect financier for dealers, allowing sales to customers who might not be able to obtain financing. The stock had solid results for its most recent quarter, with sales up 37% for the period and profit recorded for the second consecutive quarter. Although it dropped sharply on Friday, the stock hit a new 52-week high last week. In our view, at under $2.00, CPSS is a great and inexpensive way to play the re-birth of the auto finance segment.
At times, Pandora Media (P) has been maligned as a high-flying and over-valued stock. It is also the beneficiary of favorable sentiment due to its innovative platform that is simple, mobile, and not reliant on the auto industry. It doesn't hurt that the company has somehow truly figured out how to monetize the mobile space, which is to be admired. Pandora is here to stay and until management slips up with its growth rate, financials, or key metrics, it is a no-brainer under $10 per share.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
In contrast to my view, here is a gloom and doom outlook on the situation (tons of exaggeration in this article IMO):
Liberty Could Destroy Sirius Stock Value
http://seekingalpha.com/article/636261-liberty-could-destroy-sirius-stock-value?source=email_rt_article_readmore&ifp=0
By Dan Jennings
The news for Sirius XM (SIRI) stockholders just seems to get worse and worse. A takeover of the satellite radio company by Liberty Media (LMCA) could actually destroy what little value Sirius stock has left.
Liberty, which is controlled by Colorado billionaire John Malone, could use a legal mechanism called a Reverse Morris Trust to take control of Sirius, Barclays Capital analyst James Ratcliffe told the Street. A Reverse Morris Trust is a tax dodge in which a company creates a smaller publicly-traded company to control another potentially money losing company.
This would be bad for Sirius stockholders because Liberty could create a new IPO to issue more shares in the company if it implemented a Reverse Morris. Such a maneuver could create a lot of watered-down Sirius stock. It would be good for Mr. Malone because he could control Sirius on the cheap. Under a Reverse Morris, he only has to own 50% of the stock to control the company.
This kind of deal is highly likely given Sirius's potential liabilities, the biggest of which is the $330 million lawsuit that Howard Stern and his agent have filed against the company. The suit has been dismissed by a New York judge, but Stern is appealing.
The reason for the suit was that Sirius refused to give Stern millions in stock options he was promised when he took his talk circus to satellite radio. Sirius later reneged on the deal by claiming that its original contract with the shock jock was abrogated when it merged with XM. Malone might try to pay Stern off with shares in the Reverse Morris, which might be cheaper than a court battle.
That could send Sirius stock falling even lower because Stern would presumably sell off those options on the market. Stern and his co-plaintiff and agent, Don Buchwald, would be able to take home a nice chunk of change. Mr. Malone would be able to keep a valuable entertainment asset happy and get a tax write-off while settling a potentially costly lawsuit that could generate a lot of negative publicity. Everybody would be happy but Sirius stockholders, who would once more get the shaft.
Sirius Expanding Reach in U.S. Car Market
The interesting thing about Sirius is that it is doing a great job of expanding its market share even as its stock value sinks. One market Sirius is going after aggressively is used car buyers.
Around 1,200 Ford (F) and Lincoln dealers have signed on to offer free Sirius XM in all of their used cars. That will give Sirius tens of thousands of potential new subscribers. Even if it just 10% of those used car buyers sign on with Sirius, it will be a huge boost to the company's profits. It could also mean a long -term boost to the company's earnings per share if it ever recovers from this takeover battle.
This means that at least one of Sirius's initiatives, its Used Car Program, is working, so. So this stock displays a lot of potential for future earnings.
Advertising Agencies ignoring Pandora despite Claims of Popularity
Streaming music service Pandora (P) is now the most popular radio network for American listeners between ages 18 and 49, data from ratings firm Triton Digital indicates. Yet despite this popularity, advertising agencies are still skeptical of digital radio and refusing to buy advertising on Pandora.
Trade journal Ad Age surveyed media buyers for advertising agencies and found them extremely skeptical of Pandora and its claims of large numbers of listeners. The big reason why Madison Avenue is so skeptical of Pandora is that its ratings are not measured by the most respected radio-ratings service, Arbitron. Instead, Pandora has to make do with less -trusted ratings agencies like Triton Digital.
Madison Avenue's skepticism of Pandora is reflected over on Wall Street - the company's stock values fell by 10% in trading after Memorial Day. It should be noted that the real cause of Pandora's fall could be investor weariness driven by all the negative media coverage of the Facebook (FB) IPO debacle.
Pandora actually has a lot going for it, and it should be going up on the news about advertising. Pandora stock should shoot up dramatically if it could ever convince Arbitron to start counting its listeners. If that ever happens, expect increases in Pandora shares.
Pandora shares should go up in value when the media gets bored with Facebook and shifts its attention elsewhere. Once investors start evaluating Pandora as a completely separate company from Facebook, they may change their minds about it and start buying again. That means Pandora's shares could start going up once the dust from the Facebook crash settles.
Samsung gets into Digital Music Business
Pandora, Spotify, Sirius, and Clear Channel (CCO), which owns and operates iHeartRadio.com, have some serious competition in the streaming music business. The giant Korean electronics Samsung (BC94 in London) has revamped its answer to iTunes, the Digital Music Hub.
The New York Times reported that the new Music Hub will offer subscribers 19 million songs for download and free storage in cloud lockers. Subscribers (presumably owners of Samsung devices such as smartphones and Galaxy tablets) will pay around $16 a month for the right to download any song or upload a personal library of songs to the cloud. So far, Music Hub is only available in Europe, but it should reach North America real soon.
This could be a huge challenge for Sirius, Spotify, and Pandora because Samsung's gadgets are extremely popular. It has taken nine million preorders for its Galaxy SII phone alone, and an estimated 40% of the devices using the Google (GOOG) Android operating system are made by Samsung, so. So Music Hub could conceivably take a lot of market share away from companies like Sirius and Pandora.
A successful roll out of Music Hub in the U.S. could hurt Pandora's earnings per share and stock value. The real danger to Pandora would be if Samsung or telecom companies such as Verizon started giving Music Hub subscriptions away with devices. That strategy has worked well for Sirius in the car industry. It is highly likely because Samsung definitely does not need the revenue from music subscriptions. It could use Music Hub as a loss leader to get consumers to buy its phones and tablets.
Election could Boost Revenues at Pandora, Sirius and Terrestrial Radio Operators
The upcoming election could boost revenues and increase earnings per share at Pandora and terrestrial radio operators such as Clear Channel, Cumulus (CMLS), and CBS Radio (CBS). The source of this extra revenue is obvious - both President Obama and likely Republican nominee Mitt Romney plan to spend incredible amounts of money on advertising this year. Both parties plan to lavish vast sums on Congressional elections as well.
Politico reported that Republican groups are planning to drop a $1 billion advertising bomb this year. The biggest political donors, the Koch brothers, reportedly plan to spend $400 million of their own money to buy ads for GOP candidates. Mitt Romney's Super Pac (Political Action Committee) Restoring America's future is trying to raise $100 million for advertising. This is on top of the $800 million that the Romney campaign and the Republican national committee are trying to raise for advertising. To add icing to the cake, the U.S. Chamber of Commerce is trying to raise $100 million for even more political advertising.
The Democrats are also doing their part too -- unions are planning to spend between $200 and $400 million on behalf of Democratic candidates. President Obama has his own super Pac Priorities USA, which is also planning to spend $100 million to counter Romney. As of May 21, the Democratic Party and liberal groups had raised around $462 million for advertising purchases for Congressional elections.
It's obvious that a large percentage of that money is going to radio, particularly talk radio. That would benefit Clear Channel, Cumulus, and CBS. Pandora could also benefit, because Obama needs to mobilize younger voters, who are presumably listening to digital radio, if he wants to win. Expect the Democrats to make some major ad buys on Pandora. Sirius could also benefit too because people listening in cars are a captive audience and, both parties are likely to target.
Election time ad buying could really help Pandora, which needs all the cash it can get. A few major political advertising buys could boost Pandora's stock value and earnings per share. Political advertising purchases could also help Sirius and Clear Channel's efforts to sell digital radio advertising.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
This sentence at the end sums up my feelings about the whole thing:
"Liberty Media is not really an enemy in my opinion, but rather a conduit through which this company can move to the next level."
I think Mel has done a great job taking this company from negative to positive. Moving forward, Liberty control will provide the greatest opportunity for successful continued growth.
Mel Karmazin could get canned in Sirius XM takeover
http://www.examiner.com/article/mel-karmazin-could-get-canned-sirius-xm-takeover
Howard Stern may have a new boss before the year is through.
Liberty Media, which currently controls five of Sirius XM's thirteen seats on the Board of Directors, is looking to take over and push out current CEO Mel Karmazin. Liberty bought a 40% stake in Sirius XM back when the company was in danger of bankruptcy in 2009. The media conglomerate accumulated even more SXM stock this month, upping their hold on Howard Stern's employers to 46%. Now, Liberty is making a move to take over the majority of seats on the Sirius XM board, which would almost certainly mean curtains for Karmazin.
Karmazin was a close personal friend and colleague to Howard Stern when the King of All Media first moved to satellite radio in 2006. Things went South after Sirius XM failed to pay Stern $300 million in promised stock bonuses after Sirius merged with XM in 2008. A judge recently ruled against Stern, but he is appealing.
In any case, Karmazin shouldn't count on any support from Stern--moral or otherwise. Since his own lawsuit against the company, Stern has been ripping Karmazin on air for holding big budget celebratory events on Sirius XM's dime. Stern has called the parties Karmazin's attempt to throw himself a series of "bar mitzvahs".
The Howard Stern Show returns live on Monday, June 4th.
I bet Mel is fuming over it.
But he put himself in this position years ago. He had to know it was going to happen.
There must be some benefit for them to be squabbling like this. We all know how it is going to end. They also own way more shares than I do, so hopefully their charades will benefit me in the end as well.
Only time will tell with this one.
I remember that. Now I'm thinking this statement by Maffei is just something to make Mel upset, get him emotional. He is saying this to appear as the bigger person, knowing full well that Mel will never agree to it.
I can't see him on CNBC, but I just got this alert in my email..
Friday, June 1, 10:56 AM Like a cat playing with a still-breathing mouse, Liberty Media (LMCA -1.6%) CEO Greg Maffei tells CNBC that the company isn't in a rush to make a final decision on how big its stake in Sirius XM Radio (SIRI -1.0%) will ultimately grow to and that he would like to see Mel Karmazin stay on as CEO of Sirius.
The plot thickens!
Sirius XM To Liberty: Not So Fast
http://seekingalpha.com/article/630011-sirius-xm-to-liberty-not-so-fast?source=email_rt_article_readmore&ifp=0
Thursday morning it was widely reported that Liberty Media (LMCA) will move quickly to take over control of Sirius XM (SIRI). They have filed a Reconsideration Petition with the FCC to get de facto control of the satellite radio company:
> NEW YORK (AP) -- Billionaire John Malone's Liberty Media said Thursday that it will convert nearly half of its preferred shares of Sirius XM Radio into common stock and nominate a slate of candidates to the company's board, as part of its ongoing push to take control of the satellite radio company.
Liberty's first petition for de facto control of Sirius was rejected based on the fact that they filed without the proper passwords and signatures needed for an application. The FCC also noted that Liberty must increase their representation on the Sirius XM Board to constitute a majority. Currently, there are 13 members on the board, and Liberty is represented by 5 of them.
Sirius shares have fallen recently due to the European Gloom and Doom, and the uncertainty of this Liberty situation. But finally, Sirius XM has broken their silence and commented on this recent activity brought on by Liberty. In an SEC filing Thursday afternoon they wrote:
> In the Reconsideration Petition, Liberty Media indicates, among other things, that it "intends to take action as soon as practicable to cause the nomination and election of persons to Sirius' Board of Directors such that a majority of the persons serving on the Sirius Board of Directors will be persons nominated by Liberty Media." Liberty Media has not provided us with any notice with respect to such actions. A special meeting of our stockholders may be called prior to our next annual meeting by our secretary or any other officer if they are so directed by not less than two members of our Board of Directors or our Chief Executive Officer. No such direction has been received to date. Stockholders are not permitted to call a special meeting and, absent a special meeting, cannot make a proposal with respect to the nomination of directors other than in connection with the next annual meeting.
They went on to say that Sirius and Liberty are negotiating right now:
> We have been engaged in discussions with Liberty Media to explore possible transactions with respect to its ownership interest in Sirius, although we have not reached agreement with respect to a specific transaction that would be mutually beneficial to both our common and preferred stockholders. There is no assurance that these discussions will result in any specific action or transaction. We do not expect to disclose developments with respect to these discussions.
At least they are talking. Sirius is an excellent company, and John Malone knows it. As a matter of fact, he is probably more bullish on Sirius than most shareholders. He wants it. But a lot of the uncertainty revolves around how he will get it. One silver lining that may come from this is we might get a buyback. Sirius CEO Mel Karmazin has been adamant about being able to return capital to shareholders. His favorite idea is a buyback, however, at the Annual Meeting this month he said that he will not approve a buyback that gives Liberty a bigger chunk of the company.
But now that Liberty is converting half of its shares to common stock, those shares would have to be included in the buyback. This could be a small carrot in the negotiations because Liberty wants a share buyback, and everyone knows that.
Why is Malone so desperate to take control of Sirius? Why are these two guys going after each other like this? I really think there is insider information that we don't know. But on top of that Sirius is a great company. For the last several years it has improved dramatically. Sirius Bears are quick to point out that the stock is overpriced and the P/E ratio of 23.69 is high. However, it has really come down since last year:
The forward P/E of 17.18 is even better. It is interesting to note when the P/E was over 150 the price of the stock was up to $2.44 per share. Another thing that the company has is lots of cash:
As a matter of fact, this is the most cash that the company has had since the merger. And the gross margin is exceptional at 63.68%. And it continues to rise:
Due to the structure of Sirius the GM will continue higher as the subscriptions increase, due to the costs decreasing as the subs go up. And the subs are now projected to be over 23.4 million by the end of the year.
The debt has been a problem for some investors for years. However, the debt is now the lowest it has been since the merger in 2008. And according to several reports, some of that chunk of cash will be used to pay down more of the debt. The cash at the end of 2012 should be over $1.5 billion.
So we can see what these men are fighting over. As they say, a picture is worth a thousand words. And for a smart investor these pictures are worth more than that. It is a shame that the big story is how Liberty plans to get these assets, rather than stories about how well Sirius is doing right now.
Disclosure: I am long SIRI.
Liberty Media Moves For Full Control Of SiriusXM
http://seekingalpha.com/article/629241-liberty-media-moves-for-full-control-of-siriusxm?source=email_rt_article_readmore&ifp=0
Today, May 31st, Liberty Media (LMCA) filed with the FCC a petition for reconsideration of its applications to transfer de facto control of the SiriusXM (SIRI) licenses. The original application had been dismissed on May 4th. In an article last week titled Sirius XM: Is 46.2% The New 50 Percent? it was noted that part of the reason for the FCC dismissal was the lack of a demonstration of an intent by Liberty Media to move for de jure control of SiriusXM. Specifically, the FCC wrote:
Furthermore, we conclude that a waiver of basic filing requirements is not warranted, as the facts disclosed in the referenced applications are not sufficient to establish that Liberty Media intends to take actions, such as conversion of preferred to common stock and installation of a board majority, that would constitute exercise of de facto or de jure control.
In the summary of that article it was suggested that Liberty Media had taken steps to increase its ownership and could convert up to half its preferred shares to demonstrate their intent to take control:
Its forward contract and open market purchase can be used to demonstrate that Liberty is taking steps to take de jure control. Converting half its preferred shares (allowing it to maintain rights) would make their case even stronger. It will be interesting to see how the FCC rules.
According to its 13D filing, these are precisely the justifications Liberty Media is using to demonstrate intent. But Liberty goes even further, detailing how they plan to take control should the FCC approve their request for de facto control. In the 13D filing Liberty Media states "among other things, that it intends to assert control over the Issuer [SiriusXM] upon receiving FCC approval." Liberty Media also describes the steps it will take to gain control:
Convert almost one-half of the shares of its preferred shares to common stock bringing its total (including the open market purchases and its forward contract) common stock percentage to more than 32%
As soon as practicable put up its own slate of directors so that they would constitute a majority of the SiriusXM board
Vote all of the Liberty Media's shares of common stock in favor of its slate
Solicit proxies from other shareholders to support the election of the Liberty Media nominees.
Liberty Media also stated that it "intends to continue purchasing shares of Common Stock in the open market, depending upon price and other market conditions" and that it "may purchase sufficient additional shares of Common Stock that would enable it to replace the entire Board of Directors by unilateral action."
Liberty Media also left itself the option to change its plans. The 13D notes that Liberty Media would "continuously review its investment in" SiriusXM. In other words, it could buy more shares, or sell its shares, depending on market conditions, government regulations, business conditions, etc.
Summary
Those SiriusXM investors that were wondering what Liberty Media would be doing next have their answer. Liberty Media intends to take control of SiriusXM and is looking to get the necessary approval from the FCC.
The FCC rejected the initial request because Liberty Media had not shown an intent to take control, and as a result did not waive the electronic filing requirement. Now that the intent issue has been addressed, the FCC will need to decide whether Liberty Media should be granted de facto control and whether it would be a suitable licensee.
And the SiriusXM investor will need to decide if Liberty Media taking control is good for the company and their stock.
Disclosure: I am long SIRI. I have $3 January 2013 covered calls against most of my Sirius position, as well as some $2 and $2.50 January 2013 covered calls. I may initiate (or close) a buy stock/sell option position in Sirius, discussed in another article, at any time. I have no positions, or any plans to open positions in the next 72 hours, in Liberty Media.
This is so much nicer than the beta, very easy to read!!
Excellent work, thanks!
Thursday, May 31, 9:35 AM Liberty Media (LMCA +0.3%) asks the FTC to reconsider its refusal to allow the company to take control of Sirius XM Radio (SIRI +1.2%). Liberty increased its holding in the satellite radio company to 46.2% from 40% earlier this month.
http://seekingalpha.com/currents/post/344541?source=email_rt_mc_readmore&ifp=0
Ah yes I misread.. it seems I was looking at ULT.. apologies..
What do you make of the relatively low volume today, and the RSI breaking 70?
Looks like there are strong fundamental factors (my last post) as well as strong technical factors (your analysis).
Sounds like this is a good place to be.
Is Sirius XM Radio Still A Good Play?
by Sol Palha
http://seekingalpha.com/article/615811-is-sirius-xm-radio-still-a-good-play?source=email_rt_article&ifp=0
Sirius XM (SIRI) ended the first quarter with a bang. It added 405,000 new subscribers for a new record of 22.3 million. Net income surged to $108 million and management raised its 2012 new subscriber guidance figures from 1.3 million to 1.5 million subscribers.
Reasons to be bullish on Sirius XM Radio (SIRI):
- It owns an extensive satellite network that provides audio content through over 170 channels.
- Subscribers grew to a record 22.3 million.
- Management raised adjusted EBITDA to $875 million for 2012.
- It reported record revenue of $3.10 billion up 7% year over year.
- Net income increased from $-352 million in 2009 to $427 million in 2011.
- EBITDA more than tripled from $276 million in 2009 to $1.01 billion in 2011.
- Cash flow per share soared from $0.04 in 2009 to $01.9 in 2011.
- Sales increased from $2.4 billion in 2009 to $3.01 billion in 2011.
- It has a strong projected 3-5 year EPS growth rate of 25%.
- A decent interest coverage ratio of 2.44.
- A strong five year sales growth rate of 33%.
- Year over year projected growth rate of 5.3% and 28.8% in 2012 and 2013 respectively.
- Operating margins of 29%.
- A strong ROE of 79%.
- Quarterly revenue growth rate of 11%.
- A strong quarterly earnings growth rate of 38%.
- A high beta of 1.42 makes it a good candidate for covered writes or for selling naked puts on.
- A positive levered free cash flow of $466 million.
- In Dec of 2011, it launched SIRIUS XM.20 product suite. This product includes Wi-Fi, Bluetooth, and Internet and will expand its bandwidth by another 25%.
- It launched new Mexican and Latin channels; these include Spanish news channels and also channels that provide sports commentary in Spanish; this product is intended to target the lucrative Hispanic market.
- S&P upgraded its credit rating from "BB-" to "BB" and state that its overall outlook for Sirius XM is stable.
- $100K invested for 10 years would have grown to $306K.
For the first quarter of 2012
- Quarterly revenues surged to a new record of $805 million, Up 11%. At this rate, revenues could surge past the $3.3 billion mark for 2012.
- Net income rose by 38% to $108 million.
- Adjusted EBITDA came in at $208 million up 15%
Suggested strategy
It has experienced a strong run in the past two years and after peaking at 2.40 in April has started to correct strongly. It is now trading below its 200 moving average, and the charts indicate that it could trend lower before a bottom is in place. We would wait for it to trade down to the 1.25-1.50 ranges before committing new money. Another option would be to sell puts at strikes you would not mind owning the stock at when it trades down to 1.60.
Conclusion
Sirius XM continues to add new subscribers at a torrid rate and management has already raised its forecast twice in the past six months. The latest projections are for 1.5 million new subscribers to be added in 2012, up 200,000 from the previous estimate of 1.2 million. It has pulled back quite a bit from its recent highs, but we think it would make for an even better play if it dropped down to the 1.25-1.50 ranges. Investors who are bullish on it now can sell puts to lower their cost basis.
Institutional Activity In Sirius XM Could Offer Clues
http://seekingalpha.com/article/615621-institutional-activity-in-sirius-xm-could-offer-clues?source=email_rt_article&ifp=0
Ever since Liberty Media (NASDAQ:LMCA) announced that they had entered into a forward contract last December for the purchase of 302 million shares of Sirius XM (NASDAQ:SIRI) at $2.15, there has been a lot of speculation surrounding who the forward contract is held with. After all, 302 million shares is a very large number, and no single institution seems to have been holding enough shares as of march 31, 2012 to be the partner.
One massive addition made during Q1 was by UBS. UBS was one of the institutions that worked with Sirius XM on the 7% convertibles notes due in 2014. The investment banking giant added an impressive 232 million shares in the three month period at the beginning of the year. Notable transactions included:
UBS - Added 232 million shares taking its total to 233.4 million
Vanguard added 8 million shares taking its total to 169.9 million
Wellington sold 26.9 million shares bringing its total down to 168.6 million shares
SAC Capital added 94.6 million shares taking its total to 98.3 million shares
Coatue Management added 57.8 million shares as a new position
Scout Capital added 56 million shares as a new position
Ironically there were 300 million shares added to the institutional holdings during the first quarter, a number just shy of the 302 million represented in the forward purchase contract Liberty media made.
While there is no way to tell if the undisclosed party in Liberty deal made all of their moves after March 31st, one can only assume that 302 million shares did not get traded in April without anyone really knowing. This would lend support to a stance that the undisclosed party already had at least some stake in the company, or that a substantial new player could be the group everyone is dying to identify.
The clues in my opinion would leave UBS, Coatue, Scout, and SAC Capital as the best candidates. One thing investors need to consider is that a second forward purchase contract could already exist and is simply waiting for an announcement date and a 60 day window. If this is the case, the Liberty issue may not happen as quickly as some think. The other options on the table for Liberty are open market purchases, and a tender offer to raise its stake.
Of special note is the fact that UBS was an integral part in the Liberty Media's initial investment in Sirius XM. The lead banker on the deal has now moved on to Tap Advisors, but there has clearly been a relationship between UBS, Liberty and Sirius XM. The bank would certainly be familiar with both Sirius XM as well as Liberty.
Things are getting interesting. Liberty has until about June 1, 2012 to file its appeal to the FCC in the quest for De Facto control. In its initial filing Liberty Media was denied in part because it had not demonstrated any moves to actually take control. Liberty will certainly share their forward purchase contract, their open market purchases, and perhaps some additional plans with its appeal. Stay Tuned.
Disclosure: I am long SIRI.
Additional disclosure: I have no position in LMCA
Bullish gravestone doji to end the day today...
LOL I wish I had the talent of THAT John Landis..
Thanks for sharing your analysis, I will take it into consideration. Might be looking to make a quick flip on SDS today and then pick a position right before 4pm to hold overnight..
IMO, SDS is consolidating in the 25.80 range for more movement up (SPY DOWN IMO!)
I'm looking at 5 min chart.
GLTA
Would love to see that 200sma hold, but if not its likely back to the starting gate in the mid to low .02's..
We're not gonna know where the bottom is for a few days IMO..
I plan on buying more, but not today. Falling knife status at the momemnt and I feel more comfortable buying when the bottom has been established. There will be many opportunities to accumulate in the .03's and I will be looking to re-enter.
ALL IMO! GLTA!