Zeev's Turnips Patch-No Politics (ZEEV)

[Joe Stocks]

SIRI- >>There is still upside long term (it can be $30 in 5 years if everything goes smoothly), but short term is unpredictable.<<<

$30 a share?? Let's back into some numbers. Let's give SIRI a pe of 30 at that time. 5 years out - wouldn't you say that was fair?

That's a dollar per share in earnings. SIRI currently has a 1,236,845,000 shares outstanding. There will probably be more outstanding in five years because they have some convertibles out there, but we will stick with the current number.

So, that is net earnings of $1.237 billion dollars.

Now lets assume a net profit margin on 7% (high) to come up with a revenue figure. That would be $17.7 billion in revenues.

SIRI current receives about $11 in revenues per month, per subscriber on average, they also get a small amount from advertisers. Let's say that equals $1 per subscriber (high- but giving the benefit of the doubt.) That equals $144 per subscriber per year in revenues.

So, how many subscribers do we need in 5 years to justify the $30 share price....

122,919,667 subscribers. SIRI currently has about 800,000. I guess SIRI has their work cut out for them for "everything to go smoothly". <VBG>

A more realistic net profit of 4% would mean that they would need 215 million subscribers.

You bought the hype!