Sirius Satellite Radio
by ErnestoT
February 20, 2008
I want opinions on Siri stock. I’m really considering buying some Sirius stock because of the potential merger with XM. If the two companies merge that could potentially mean a huge bump. As of February 19th it has officially been 1 year since the two companies have been fighting for the merge. As the months go by I think the government is met with more and more pressure because people are realizing that it’s a joke how long the merger talks have lasted when companies like Exxon and Mobil were able to merge after a day of hearings. I don’t really want to get into the merger but I also want to know if the merger doesn’t go through what do you guys think of satellite radio’s future? Right now the biggest growth area for satellite radio is coming from new car buyers. XM is currently installed in GM, Honda and Hyundai. Sirius on the other hand is currently being installed by Chrysler, Ford and BMW. Do you guys think satellite radio will take off the same way satellite television took off? There is a price to pay when getting satellite radio but it is also geared more towards what the consumer wants. Terrestrial radio is currently dieing with ratings plummeting could this potentially become a big opportunity for satellite radio which has been growing at a rapid pace.
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pbucelwicz
at 02:25pm on Feb 20, 2008
I don’t know much about what’s going to happen with the stock. As a techy, my personal opinion is that sat radio is not going to take off. It hasn’t really taken off much since it came out several years ago. HD radio is where it’s at. Lots of cars are coming with these pre installed now. Similar to having either xm or sirius installed as an option but HD radio is a standard option now, and it’s free. No subscription.
Paying for radio just seems weird when it’s always been free. How long are you in the car that you need a paid radio?
sergik12
at 02:30pm on Feb 20, 2008
If you really think the merger will happen then you should probably buy both stocks, XM and Sirius. Both would benefit from a merger and both should appreciate in price. You would be hedging your bets by buying both. You also have to keep in mind what the market is thinking. At this point I think the market could be pricing in the fact that the merger is likely and you may not get any gain from your purchase. It really would make a lot of sense for these firms to merge from an economic perspective; however, I wouldn’t hold my breath. I think if the merger will happen then it will be a highly regulated company that will emerge.
ErnestoT
at 02:52pm on Feb 20, 2008
You have to remember Paul that satellite radio is not just a car thing now. For instance they now both have porotable players that are about the same size as ipod’s and hold up to 5 gigs of music while also streaming satellite radio. Not to mention you can also listen online and at home. Also what about all those areas in the U.S where it might be hard for somebody to find anything decent on the radio because there in the middle of nowhere. Who knows maybe it will take off maybe it wont.. A couple years ago Sirius radio had about 150,000 subscribers.. they now have over 10 million. When Howard Stern went to satellite radio that alone was an amaaazing increase to satellite radio there numbers just jumped off the charts compared to what they were. I think the two companies merging with the direction of Mel Karmizan could lead to potentially a great product. Here’s a quote..
“Mel Karmazin ran Infinity for 15 years, then sold the company to Westinghouse, then parent of CBS. For most of his career he has been known as a “Wall Street darling” for his ability to drive up the price of his various companys’ stock. “The joke about him was that he was so pushy that advertisers used to buy airtime from Mel just to get him out of their office,” according to a Fortune magazine article.”
All I know is Mel knows what’s good for business. When everybody else discarded Howard and thought he was disgusting Mel knew Howard would be a big part in Satellite radio and it’s proved to be right. He’s so far taken all the right steps in building up Sirius and now is working on another step by trying to get this merge to go through with XM. Both companies have already agreed that Mel would run the show. I think I might be wiling to risk putting some money into the company. Right now there at 3.02 or something like that.. there high was 4.11 are you saying the 3.02 could potentially be what the market pricing would be if the two companies merged? Right now XM stock is at around 12 dollars and i’m not really interested in XM stock because if the merger doesnt go through I see sirius taking over. XM had all the momentum at the beginning but as of now sirius has rapidly started to take over.
ErnestoT
at 03:05pm on Feb 20, 2008
Also I think HD radio is the biggest scam ever. It’s regular radio but better quality. You still have the crapy stations and music and hours and hours of commercials. Not to mention nobody knows about it really..
ErnestoT
at 03:09pm on Feb 20, 2008
Oh and one more thing that sergey just made me think of. Along with signing Howard Stern, car makers, Sirius has also signed on with NFL, NBA, etc.. and just recently bought the rights to Nascar.. Projected fan base of 75 million.. the second largest behind NFL
sergik12
at 03:18pm on Feb 20, 2008
They overpaid and it will take 5-10 years after the merger for them to make money. It doesn’t make any difference who has the momentum if they merge both stocks will go up.
ErnestoT
at 03:21pm on Feb 20, 2008
Your driving me crazy with this overpaid comment. They paid Howard Stern 500 million for his contract. He made them there money back in the first 6 months of signing on. I dont see that as overpaying as far as Nascar goes.. 107 million dollars for a 75 million person fan base.. I dont think it’s overpaying..
pbucelwicz
at 03:22pm on Feb 20, 2008
Alla chimed in saying that people love sat. radio. She said that people that have it won’t ever get rid of it.
So I guess I stand corrected.
I have a TV and the internet everywhere. I think I’ll live without sat. radio.
sergik12
at 03:28pm on Feb 20, 2008
I have no use for it and I don’t want to pay for something I can get for free. Alla needs a user name so she can join the convo
sergik12
at 03:30pm on Feb 20, 2008
He didn’t make them money back Nene, they would be making money now instead of losing money quarter over quarter.
vadim.vintsevsky
at 11:27am on Mar 5, 2008
Your saying that nascar has a 75 million person fan base, that doesnt mean that 75 million people are going to buy sirius just to listen to it.
Also, i am just looking at they income statement right now and obviously im not any type of analyst so serg if you could take a look at my reasoning and let me know if its flawed….
their net income has been negative for the past 4 quarters. The earnings before interest an taxes is also negative, so i am assuming to pay their interest they are getting more loans, not a good thing.Their libilities (long and short term) have been steadily increasing. Which is fine, except that their assets have been going down. although their revenues are steady the cost of revenue sky rocketed the last quarter, possibly because they are buying all these contracts but no one new is buying sirus. And lastly, and possibly most importantly, their cash flows took a gigantic drop in one quarter from 165,587,000 to negative 67,039,000. This is based off 2007 3rdqt because there were no statements for year end 07
Seems to me like they are just loosing a ton of money. Yes they had a big surg of customers with Howard, but doesnt his contract run up in like 2 years. They are getting all of these contracts for sports, but how many people are driving throughout every one of their sports teams games. I dont think there is a huge demand for that when you can generally already get it for free.
And also as serg said if the expectation of the merger is already in the stock price, then if the merger goes through you probably arnt going to see huge gains, not enough to take on a lot of risk of a bad company. I agree with pauls orignal statement of that the demand is just not there for them to continue to be a functional company. the problem with no commericals is there there goes a lot of revenue.
ErnestoT
at 11:59am on Mar 5, 2008
I’m pretty sure you know I didnt mean all 75 million people that watch nascar are going to get sirius. Nascar was XM’s #1 market. A large portion of there XM subscribers came for Nascar. To think down south there isnt going to be a million southerners in there cars listening to nascar your crazy. I also have no idea where you got the idea that there not adding any new subscribers since signing Howard because the subscription numbers have been growing rapidly. Here is the newest Sirius fourth quarter report http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/02-26-2008/0004762348&EDATE=. They had a 38% increase since the end of 2006. Also looking at the numbers you cant just look at the net loss and think oh wow there doing bad. They have been cutting down the net loss rather quickly. The revenue has increased by 45% and the net loss although still down 563 million is still an improvement of 49% since 2006. Just look at the numbers and also read up on what a lot of analysts are saying. Although the company is still at a loss they are doing very good. The merger talk also isn’t helping sirius one bit right now but in the long run I believe sirius will prosper. Also there estimating if sirius and XM do merge that Sirius’s stock will go up to 10-12 dollars a share. High risk high reward. I also believe the merger will go through because satellite radio will always have competition when it comes to terestrial radio and mp3/mobile devices.
Again this is all my opinion. I might be wrong I might be right only time can tell.
ErnestoT
at 12:38pm on Mar 5, 2008
Also Sirius isnt just about sports channels and no commercials I dont think you realize how advanced there hardware is right now. You can pretty much select any type of music you want and also download it and store it like an ipod.. They have car units, house units, and units that are exactly like the ipod which you can carry around and listen to. Who knows what else they will bring to the table with software/hardware advancements in the future. Like Alla previously said people who are sirius or XM subscribers are die hard because they know how amazing it is compared to regular radio. When I look at XM and Sirius I think Dish Network and DirectTV. I believe it’s the future and I honestly wish I could take the chance and buy some stock and see what happens but i’m honest with myself and know as much as I would love to risk it I cant. I always have to keep my priorities in check. I just thought Siri stock would be a good conversation as it seems it has been.
sergik12
at 01:55pm on Mar 5, 2008
Good job Vadim! I like the analysis. I know a lot of people who hold both SIRI and XM but they consider it to be one of the riskies investments in the portfolio
vadim.vintsevsky
at 02:17pm on Mar 5, 2008
After reading that report i can see that they are raising revenues, but still operating at a loss, which can only be done for so long. Also, I saw that nascar has already been in sirius for a year, which could explain those revenue gains.
But he also says that the 2008 outlook is pending the approval of the merger. That does not sound like a good thing to me. This report is huge so i didnt get all the way through it and maybe they talk about future plans then. But if they got all these sports, including nascar, already and are still operating at a loss, where else is there to go. Looks like they are really banking on the merger. Also I dont see satalite radio as a household object like mp3 plays cuz yea you can choose what to listen to and use it like an mp3 player, but why wouldnt people jsut download exactly the songs they want to walk around and listen to?
And lastly, I looked at some earnings estimates from analysts, and the average is that their earnings are going to go down.
Again I did not read the whole report, if there is something in there that you feel is important for me to know, let me know. But you also have to take these reports with a grain of salt. Written by the company obviusly they are going to try to drown you in what they did right, and not going to stress what went wrong.
ErnestoT
at 03:14pm on Mar 5, 2008
I’m not sure what companies out there don’t operate from a loss when they are a new concept that people have to grasp a hold of. You need to remember Sirius itself is relatively new. The company I believe has only been running for 6 years. It takes a lot to get satellites up and hardware made etc.. I’m sure it was exactly the same with Dish Network and DirectTV. Revenue gains probably come from a variety of things and I think the strongest point for them in the future is the deals they have with car manufacturers to install the hardware.
It takes time for companies to make up loses. They cant just buy a deal with say Nascar, NFL, etc.. and except to be operating from a gain right away.. it will take time. As far as comparing it to an mp3 player it works exactly the same pretty much. Your right people can go to itunes and pay the dollar for a song to have it added to there ipod or they can have sirius/xm and when the song plays download it to there handheld and it will be saved there for however long you want. I believe right now they hold up to 50 hours of playback or something like that along with streaming.
Can you provide the links for the anaylist estimates where you saw that there earnings are going down? Everything i’ve read has insisted that there earning will increase. Right now Sirius’s balance sheet looks better then XM and every prediction i’ve read says if the merger doesnt go through the XM will most likely be the company that’s in trouble while sirius is projected to do good in the long run.
Sergey, I agree that it def. is a risky investment but if I were to have to pick one I would go with Sirius over XM.
vadim.vintsevsky
at 03:40pm on Mar 5, 2008
http://finance.yahoo.com/q/ae?s=SIRI
The thing that worrys me about sirius is that the cost of revenue went up so much. For instance between quarter ending 09/30/07 until 12/31/2007 revenue went up 8 million while cost of that revenue went up almost 50 million. Making their gross profits lower. Which in turn mamde their net income available to share holders
ErnestoT
at 03:44pm on Mar 5, 2008
I’m not sure if you read that link correctly. The year estimates are negative yes but they are saying they will most likely be an improvement from the previous year and the sales growth estimates are around up around 30%… That’s a good report not really a bad one.
vadim.vintsevsky
at 03:46pm on Mar 5, 2008
go down 40 million. Also their free cash flows might have gone up but they still need to pay down that massive amount of debt which doesnt seem like they can really do because their retained earnings are a negative 4 billion.
yes it is a new company, but 6 years is still a long time. And if you are money consistantly after 6 years, something you are doing isnt working. Meaning something has to change which seems that that will have to be a merger between the two. And if that is what needs to happen for the company to turn around; the investment is very risky because it may or may not happen.
Also, i dont think either company is good. It really seems like both companies can not exist at once. And a merger may not happen, causing a big problem.
vadim.vintsevsky
at 03:50pm on Mar 5, 2008
They are saying that revenues will go up. However, what do revenues mean without earnings? You can make all the revenues you want but if those revenues are not allowing you to cover your working capital, pay off debt, give dividends, reinvest in the company… its still not a good thing.
If you look at eps estimates the estimatse are consitantly getting worse and worse as time goes on.
Mario
at 03:51pm on Mar 5, 2008
Guys guys guys… look, here’s the deal… Siri was a $2 stock before Howard Stern made his jump to satellite. As soon as he mentioned he was joining Sirius, both Sirius and XM went up….a lot….then the market got saturated by the amount of stock purchases, which after a while (and after doubling my investment and selling), it went back down and has been steadily in the 2.50 to 3.50 range. Throughout this time, NFL, the socker league, and Nascar have been contracted and added. This of course, like any investment induces a cost, however the potential for Sirius to make an ROI in the slightly longer term is good. Now given the cost of marketing (and constant rivalry of XM)they are not as profitable as they should be. However, if the 2 merge, the potential is much larger than the risk… hence buy Sirius and if you can afford it XM as well. . As a driver that goes from MASS to NY and back, I always take my Sirius on the road with me…i know the stations and what i like to listen to.. that’s the beauty of satellite radio… u take it ANYWHERE in the country (and puerto rico…did it and it worked). HD radio has a better listening quality (roughly like a cd) but you still have tons of commercials, censorship and limitation of the radius of the signal just like a regular radio station.
Mentioning “i’m not going to pay for something that is free” is a stupid comment… just like most people used to say about cable….TV was and still is broadcast over the air… however, less choices.. less quality programing and thus people want their FX station or tbs, or commedy central… they no longer settle for just ABC, CBS or Fox.
And that my friends is where this Satellite business is going to… slowly…but like cable…surely. Its only a matter of time until you’re at a friend’s house and catch a funny episode of howard stern or all day techno…/dance/country/rock/punk/….WHATEVER floats your boat… thing is you’ll like it and when you realize for about 50 cents per day, you too can have the choices…(and if the merger goes thru…even lower cost due to packaging programing) and you’ll want them. Oh and did i mention Sirius is looking into Sirius TV… not a large investment on their part since the satellites (costing roughly 500 million each or 1 howard stern) are already up there…
All in due time…
oh and you all suck. ROFL
Mario
at 03:53pm on Mar 5, 2008
note: HD radio has a better quality than regular radio (not Sirius or XM)
ErnestoT
at 03:57pm on Mar 5, 2008
Your right EPS Trends are important but you have to realize that right now because of how long the merger talk has been going on (over a year) it’s screwing with things. Sirius will stabalize once the merger goes through or if it doesnt go through and they can concentrate on themselves.
ErnestoT
at 04:10pm on Mar 5, 2008
Dont get me wrong you def. bring up some good points Vadim. I honestly think things could go either way.. There is no way for anybody to have the right answer if satellite radio will be succesful or not.. Fun conversation boys.. time for me to get ready to go home.. somebody think of something else for us to argue about next time
vadim.vintsevsky
at 04:11pm on Mar 5, 2008
Your going off the fact that this is a good idea. That you like the idea. And yes theoretically having all the music that you need with you at all times is a great idea. But for this to be a good stock you gotta give me some facts to back up your idea. Youve told me a bunch of times that the merger is is going to happen, why is it going to happen? Cuz i can tell you reasons why it wont. You said that the merger talks are scerwing with the eps estimates, how do you know tha? The report said that their revenues are going up, but they also mentioned that income went down. gotta look at the big picture. And also eps are not really that important, can not case a company off that what so ever. I just pointed that out because it shows that even analysts say that sirius’ numbers are not good.
ErnestoT
at 04:39pm on Mar 5, 2008
Whaaat are you talking about. What makes me think the merger will go through? What makes you think it wont. Lets go over some arguments.
If the merger happens they will jack up the price. - Wrong, they will be offering different packages were you can select what channels you want with the lowest package being $6.99. On the other hand the most expensive package will be the cost that it’s at now.
Satellite radio will have no competition. - Wrong, they constantly compete with terestrial radio and mp3/portal devices. Every analyst has agreed upon this.
If the companies do not merge they will still be fine as individual companies - Wrong, XM is going through lots of troubles right now and have said they will be in trouble if the merger goes through. Analysts have also stated that if the government is so scared of a monopoly then it would happen either way because XM would go bankrupt while Sirius becomes the only satellite radio provider.
Anything else you can think of? You keep saying your stating facts while i’m stating opinion where your so wrong. You stated opinions while I have countered with numbers. First you said there not adding subscribers and I showed you that was false and they were up by 39% then you talked about the companies net loss while I showed you that they have been cutting there losses rapidly. Almost every analyst report I read said that fourth quarter report although reporting a net loss was still a very good report for the company. Oh wait I forgot the numbers I posted are marked in a way by the company that it looks good when it’s actually bad… yea that’s it…
Less face it.. this whole time i’ve said if the Merger goes through it will be great for both companies and stock prices will go up. If the merger doesnt go through I still think and NUMBERS are showing that the company growth is great and losses are getting cut. You guys on the other hand cant stomach the idea that a company with losses cant become a succesful company.
PLAIN AND SIMPLE - like I said 500000 times HIGH RISK/HIGH REWARD read it again HIGH RISK yes loooots of risk but HIGH REWARD if the merger happens $$$$
ErnestoT
at 04:44pm on Mar 5, 2008
Read mario’s comment above.. he stated it perfectly… i’m going home now.. lol..
pbucelwicz
at 04:52pm on Mar 5, 2008
@mario
Siri is a 2 dollar stock and has been hovering around that for years. Why has sat tv not taken off? Why do more people prefer cable tv over sat tv. Radio period is a dieing technology. Most people only listen to it in the car, which people are not really in a car for very long anyway. Why would I listen to NASCAR on the radio at my house when I can watch it on TV?
All those people that can’t get radio reception in the boonies… Will not pay for Sat radio, and there are only 15 people per 10 mile radius. That’s not going to help Sat radio take off.
Wow I didn’t think that sat radio was going to be such a heated topic.
Well Siri and XM great short term gain but a lot of risk if there is a merge. 25 years down the road… No way will these companies still exist.
ErnestoT
at 04:59pm on Mar 5, 2008
ONE LAST COMMENT!! hahaha god we really need to be able to edit posts to add on.. If it was just my opinion and if satellite radio isnt doing well like you said please explain to me why in a couple of years the subscriber base has went from 200,000 to 8 million? Please enlighten me if there is no interest where are these subscribers coming from?
Mario
at 05:04pm on Mar 5, 2008
Ok, ok….so let’s go with your thought process… Why do people perfer cable over Satellite? Hmm… I dunno, maybe because cable offers some technological advancements such as VOD (Video on Demand)… if it didn’t…would you be paying $5 for a cable box or $10 if its HD per month along with a bill of about 100 to 120 per month depending on packages and premiums? Whereas Satellite TV is actually cheaper, doesn’t charge you for equipment and does actually have better quality picture and sound. Cable will diminish soon due to competition from Verizon and its TV packages. Nevertheless, the reason why satellite radio won’t dissapear is because people like to listen to music or specific shows… just like certain shows on tv drive revenue, so do specific shows on satellite radio…
demand always drives revenue…and the truth of the matter is, there are plenty of people that enjoy listening to howard stern or NFL…true, if you’re home, you might watch Nascar instead of listening to it..but if you’re not home…isn’t it convenient to be able to listen to it if you’re a true fan… and honestly, is 50 cents a day a lot to pay for your favorite shows??? 50 cents!!! Get real..it’s affordable and enjoyable.
pbucelwicz
at 06:27pm on Mar 5, 2008
Verizon is a cable. The 100 dollars includes internet and phone. Do you own Sat tv? How often does it cut out? Hows the internet connection with Sat tv? I mean your DSL…
I am asking this because I just don’t know the answer. How do sat radio shows bring in revenue? If you are paying for a service that is commercial free? Just like paid sat tv and paid cable tv have commercials, if sat radio wants to make more revenue they need commercials.
I agree 50 cents a day is cheap but for me personally it’s not worth it for me. Not enough to persuade me. I listen to the radio in the car for my ~25min commute that’s it. If someone paid me $185 a year to listen to a few commercials I would do it.
Between siri and xm combine total of 17 million subscribers, is about 5% of the USA population. Is that a lot? Doesn’t seem like it to me. I bet 90% of the people in the USA have cell phones.
sergik12
at 06:33pm on Mar 5, 2008
OK all good point and also a lot of nothing from Mario :P. You guys realize that there is a difference between a good idea and a good stock right? We all agree that satellite radio is a good idea but it’s not necessarily a good stock at this point. SIRI is loaded with debt and keeps loosing money, it doesn’t matter that they have been cutting losses Nene they are still losing money and in the investment world that is what counts. People are willing to pay for potential growth but there is a limit how much risk they are willing to take. In this case the risk does not equal the reward. Even if the merger happened both firms are 10 years away from making the investor any money. With lower rates from the merger I wouldn’t be surprised if the timeline was even longer. If they are allowed to merge there absolutely no way the government would not impose strict price regulations, it would essentially be a quasi-government stock. As much as I like Cramer Nene I don’t need his analysis to evaluate a stock. In my mind this stock has about the same cost as toilet paper and you know what we use that for. ? No one take high risk, people take calculated risk and this case the risk is too high.
Just my 2 cents!
ErnestoT
at 06:35pm on Mar 5, 2008
Your right as of now it’s not a whole lot of subscribers.. But it is a lot from where they were a couple years ago. Not to mention it’s a new company and with new companies it takes time to generate consumers. DishNetwork and DirectTV were exactly the same. It took a while to pick up subscribers but now there both doing very well.
I think a lot of people are loosing focus on the original topic of this whole thread. This was more about do people think there is a potential for making money quickly with a merger of Sirius and XM.
If the merger doesn’t go through it’s more because of the FCC and the gripes with Howard Stern and all the battles they went through with him back in the viacom days. Right now there really isn’t I don’t think a valid argument for not allowing these two companies to merge. Is there a good chance they wont merge? Yes, because of the FCC. Is there also a good chance they will merge? Of course because of what there offering and what the two companies would get out of a merger. Even though I wont be buying stock I do hope the merger goes through and the people will prosper
This thread has taken a complete turn to the opposite direction.
pbucelwicz
at 06:41pm on Mar 5, 2008
Agreed… How’s CFC stock? HAHA just kidding
ErnestoT
at 06:42pm on Mar 5, 2008
+1 for Sergey. Although we look at Sirius differently you thinking it wont succeed in the long run and me thinking it will succeed in the long run I have to say good post.
If the merger doesn’t go through and the stocks plummet Sirius could always go bankrupt and start all over again until it succeeds.. kinda like the airlines
Oh and about the Cramer comment I don’t care what you guys say I like him even if the wall street calls him a moron..
and he wasn’t the only analyst I was reading so please don’t try and apply that.
vadim
at 09:19pm on Mar 5, 2008
Serg said what i was planning on saying, and what I already said in earlier posts.
But I am not saying that sat radio is a bad idea, or that sirius will never make money. I am saying that it is a bad stock right now, that simple. The expectation that the merger will happen is already in the stock price, and because no body knows if it will happen, if it does not the stock can plummet. And because its only a 2 dollar stock, if it looses one dollar, very easy to do, you loose half the investment. Is this risk worth it possibly going up and you making some money. Ernesto I understand higher risk = higher reward, after all i am a finance major, but it also comes with a very large potential for loosing money.
And when i said you were stating opinions and I am stating facts, i was right. I am just telling you their numbers now. You showed me that revenues are going up and i still told you that earnings are negative. Its just a fact negative earnings are a bad thing. you also told me that nascar would boost revenues and I told you that in their own report they said they’ve had nascar for a year now, so those numbers are already in it and they are still loosing money. Also you gave me the opinions of some analysts, and I gave you the opinions of others that say the earnings will still be going down. Its earnings that matter not revenue.
Mario you compared it to cable and sat tv, but I really do not see the comparison. Does the average American spend more time at home or in their car? Obviously home therefor more possible demand = more demand. Yea satrad is a great idea but is the demand really there for the long run? Do people listen to enough radio every day to warrant them paying for it. And yea the numbers for it are still growing but a hell of a lot less in the past. their growth is slowly leveling off. The people who have it now are the people who wanted it, there isnt a growing population of drivers.
I was just telling you the facts, the numbers just are not right for sirius or xm for that matter. Overall THEY ARE STILL LOSING MONEY EVERY QUARTER. you gotta ask how many more loans are they going to be able to get when they are already very high? How many more contracts are out there for them to acquire? and how are they going to pay for them?
You mentioned the airline industry, well the airline industry is subsidized by the govt so they will never fail because the economy as a whole would fail if they went down, so they are not even close to being the same.
And lastly lets say they start making money this year, they still have an obscene amount of debt to pay off before the actual company, and the stockholders see those profits.
This is a great topic. I’ll give ernesto props for coming up with this.
P.S. i can stomach that a company with looses can become a great company. But i know that a hell of a lot more companies with looses become very large fire sales.
ErnestoT
at 09:52am on Mar 6, 2008
The only thing i’m going to counter argue right now since i’m soo done with this thread now is the stock price if the merger goes through. $2.85 will no way be the stock price if the merger goes through. If the news was announced of a merger the stock price would jump a good amount do to the overflow of people buying the stock the same way it did when it was announced that Howard Stern was joining Sirius. I could see the stock jumping up to 8-10 dollars.. None the less well written counter argument +1 for you.. except for the numbers thing.. I pointed out a lot more then revenue gains
Now everyone think of some new topics that we can discuss. This site needs traffic!
vadim.vintsevsky
at 09:54am on Mar 6, 2008
i posted this last thing last night but it didnt go through for some reason, i blame you paul
the jist of it saying that I am not saying sirius will never make any moeny, but I am saying that it is not worth it now. I understand that high risk = higher reward, i am a finance major, but it also comes with high risk. And sirius is jsut to risky right now to take a gamble.
You showed me that they are making revenues and growth is increasing, and i told you that they can make all the revenues they want but their earnings are still negative, which is by far the most important thing. You told me analyst say its a good stock, i showed you analyst saying predicting earnings going down. You said they are going to get a huge fan base from nascar, but that report said they have had nascar for one year, and they are still loosing money.
And lets say they they start making money, they have such a large amount of debt it will be a very long time before the company, or the shareholders will see any of that. You gotta ask yourself how much more debt can they take on, how many more years can they run with negative earnings, and what other contracts are out there for them to gain large amount of customers.
Just seems like a very bad, risky company right now, so if the merger doesnt go through that price is going down at least a dollar.
and yes i can stomach a company thats loosing money can become a good company, but i also know that 100% of the time a company that is loosing money is LOOSING MONEY, and those companys tend to fail. You cant stomach that a great idea isnt always going to be a great company, and that great companys arnt always going to be great stocks.
Two comparisons that were made that i do not agree with. First mario you compared it to cable but i dont think that is justified. Most people spend a hell of a lot more time watching tv than listening to radio. Therefor they are going to want the best tv that they can get. People on average dont spend that much time each day listening to the radio intently therefor there is a much smaller audience for satrad. Also somebody mentioned airlines and how sirius can just fail and start over like airlines. Well airlines are subsidized by the govt so the business as a whole will never fail. Thats why airlines can still run after they loose all their money. Normal companies can not do that because nobody is going to subsidize them.
Ernesto I give you props, this is a great topic
vadim.vintsevsky
at 09:54am on Mar 6, 2008
perhaps you should listen to cramer some more and let us know what he thinks is a good stock so we can debate it
ErnestoT
at 10:07am on Mar 6, 2008
It’s comments like that.. that annoy me.. you guys think i’m a cramer follower but you have no idea what your talkign about.. I listen to Howard Stern and only Howard stern.. cramer was on his show and most of his counter arguments for the merger come from Howard Stern.. stop with the dumb cramer comments.. I know sirius because i’m a sirius follower not a cramer follower.. I think if you looked at my ipod it would show that.. I know more about Sirius then anybody here would ever know.. and none of you can argue that.
vadim.vintsevsky
at 10:19am on