This is just not true. I’m invested in SIRIUS XM (ticker: SIRI) since 2005. I got in around an average cost of $7 per share. I watched (suffered) as this investment was nearly wiped out in 2009 when SIRI dropped to .05 cents!!!! A NICKEL!!! Then a white knight investor (sound familiar!) named John Malone RESCUED the company by making an investment of his own into SIRI (a loan of $500+ million) to keep SIRI afloat because he saw VALUE. While the price was at PENNIES, I made one of the best financial investments I’ve made so far in my investment career by purchasing shares to get down to an average cost of $1.25 per share.
Today it trades at $5.59 as I type this. Last summer it hit a 14 year high of $7.70. I state all this because they had, (at one point after nearly going bankrupt) 6.5 billion shares outstanding. Pundits from those early days after the company was saved called for reverse splits; thankfully, that never happened.
What did happen was that lifeline provided by John Malone gave the company the chance to breathe and focus on its business. From the dark days of Feb 2009 to today, SIRI has grown into a CASH COW. It’s subscription based model and content (which is the product it produces) grew and allowed them to make further investments in the company (you may have heard that they purchased PANDORA Radio this year). They currently generate over $5 billion a year in revenue and started buying back shares (investing in the company) years ago to bring the share count down to 4.6 billion shares over the last several years.
Had they entered the potential black hole of Reverse Splits as many investors called for, there’s a good chance that the shorts, that nearly bankrupted the company before 2009, would have been given more opportunities to do so again and again each time a reverse split was completed, and if you study reverse splits, once you do one, you tend to go down that rabbit hole over and over till there’s nothing left. For further info, SIRI had one of the historically highest short positions of any company during that timeframe referenced above. I’m talking 200+
million shares short. They never did the reverse and myself and many shareholders like me are thankful for it.
What drew me to investing in LQMT was the similarity of a company with a fantastic product (like SIRI) that got their own white knight in Prof Li. It just needs time to BREATHE and grow into what I hope will be a revenue producing CASH COW similar to what SIRI became. One of the pluses LQMT has that SIRI didn’t have initially, is/was little DEBT to deal with. I’m not saying that LQMT will have to generate $5 billion a year in revenue (although I wouldn’t be AGAINST THAT HAPPENING) to be successful. It just needs to generate consistent revenue that will allow it grow its business and perhaps invest in the company by issuing BUYBACKS of shares to reduce its share count much like SIRI did. If it is allowed to do this without the possible negative results associated with a reverse split, I absolutely believe that they can get over a dollar a share and then some...
Now, if LQMT and their people could just communicate better with their investors, it might take a little bit of the stress away while we wait for them to BREATHE and grow.
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