Why buy now? The market is trending down...Siri is trending down. Elections, Geo-political issues, no announcement on subs, no OEM deal w/ Ford, probable need to dilute w/in 15 months. The lovely quotes from Teddy Roosevelt, Mark Twain, et al are nice but how about some which apply to investing: "the trend is your friend"; "never try to catch a falling knife". Why not wait for the market and Siri's trendlines to turn in a positive direction. It won't be too late. Anyone who thinks they can call a bottom is delusional.
I think you're right Clay. In fact, that's always been my retort to people who "slam XM and their debt". They have "out-paced" in sub-acquisiton, the burden of their debt-load, and being-in-bed with GM HELPS a lot.
But, even though I "poke fun at XM", and wonder why anyone would subscribe to them with Sirius' superior content (plus I really don't like Clear Channel!) But, that aside, XM is probably more a friend to Sirius than we'd like to admit! It's the "industry-as-a-whole", that we want to see catapulted, as investors in this sector! And XM at 2 Million subs, helps give credence to the "whole of the industry". Although one must admit, how strong would XM's sub-count be, without them counting "every single GM unit", whether it's a 3-month promo. or a "yearly pre-pay"!????
I see a lot of "XM self-installs" too, so it's still probably very high.
And probably best to "leave-off" of this discussion, as you said, by waiting to see what the next few months "tally-up" for Sirius sub-wise!
It would be nice for Sirius to have a "surprise" for once; but without "real and meaningful OEM support" (those 500,000 Chrysler subs are nice, but they are over the course of year(s)? 2005/6?....we might not see the "big-bang" until the full force of our recent "retail distribution channels" actully "distributes", in some quantity! Time will tell...and as it does, I fully enjoy both of my Sirius subs! Nice new boomboxes too! Very professional-looking!
If SAT RAD is viable...and I'll concede it is....there will always be 2 OR MORE providers. I don't find XM's debt...what is it...$400 million to be such a huge burden given their rapid growth. GM is an almost partner like relationship w/ XM. They are not about to force an issue which would be detrimental to the owners of GM vehicles equipped w/ XM...what a public relations nightmare that would be for GM. As to Siri's growth rate...let's see what it does for the next 5 months. Given Breakeven is somewhere in excess of 2 million subs, the next two quarters might help to better determine when that happy day might occur.
"...based on current growth rates." That's the optimal phrase in your last post.
Why would you believe that Sirius will maintain current growth rates when it has increased its retail distribution by some 20,000 retailers? Have you factored-in the guaranteed 500,000 Chrysler subs?
What will Ford bring-to-the-table in 3rd Qt '04?
What about Dish?
It's not "conservative" to base your figures on "Sirius' current growth rates", it's silly!
And yes, I think it's important to ask about XM's debt, as a Sirius investor, b/c if XM struggles with increased interest rate cost, and it reflects in its' PPS, then that could help bolster Sirius' "financial picture", by turning investment dollars in the sat-rad industry, toward Sirius!
We agree on most things. However, Siri shareholders need to focus on SIRI finances. XM borrowed rather than dilute..their choice. I find the distinction to be rather inconsequential long term. By diluting, SIRI in effect borrowed from the existing shareholders at the time of the dilution. XM has more cash flow to cover their debt and I believe the loan was from GM. Given the information available I am unable to determine what the # of subs needs to be for Siri to turn to profitability. I do know it won't be within a 24 month time frame based on current growth rates. There is a possibility this stock will drop under two dollars...I bought at $1.78 not too long ago. With no financial transparency, this stock could do anything as the price is based on emotions and momentum, not fundamentals.
Yeah, I think we agree on more here than we apparently dis-agree on!
The only way I would "average-down" Sirius now, is if I had a "boat-load" of capital, risk-capital that is.
As I said, I "fell-to-the-temptation" to buy another large chunk at $3.00; but much or my reasoning in doing so was that my "time-line" for that particular buy is rather LONG!
The main problem I have with Sirius "isn't the question of its' viability", but more the question of its "shares-outstanding", which is tremendous! It takes remarkable impetus to move the PPS with a Billion plus shares!
Which brings me to the "XM question". Do you know if XM's "debt financing" is "locked-in at fixed rates"? If I was an XM investor, I sure would want to know that, b/c interest rates are "going-up", and that's one thing that could really be a strain to a "debt-heavy" corporation!
I guess my big hope with Sirius and its many, many shares is that "everything that it has done, that has resulted in a need for it to raise capital", has largely been done in an effort to "bolster the Co.'s future cash and income position". While all the "additions" may have been costly, such as NFL, increased content expenses, and distribution cost, one has yet to see the "effects" of these investments, and that will be told in "future sub-counts", and it's my bet and contention that the sub-rate and growth will outweigh the "cost" of acquiring these subs via issuance of stock!
Agreed. Not saying don't invest...just be prudent. Wait for the "worm to turn". So what if you don't get in until $3.30...$4.00 the day meaningful news does happen. I own some purely speculative stocks...nothing wrong with owning...but I don't keep pouring money into them if they turn down.
You know, that's not as big a concern to me as what the future hold as far as the Sirius-Dish alliance is concerned with beaming video into the back seat! That's more my concern! If you don't believe that "video is coming to a backseat near you, soon", then you havn't seen the vehicles I have, stacked-up bumper-to-bumpber, with DVD on up to 3-4 screens throughout some people's ride! At Beale St. on a Friday/Saturday night, here in Memphis, TN, I can attest, that "video in the vehicle" is a very, very real thing; and I'm excited and proud to possibly be a part in something that could revelutionize they way we "commute in the backseat"!
Too "conservative" imo Clay! You'll have a hard time making any "real gains" in the Market, playing supposed "safe plays'!
They call Sirius a "speculative stock", but "what isn't really"? Any play in the Market is "speculative". With Exxon-Mobile, you're "speculating" that they won't be "over-taken" by a "whole new industry", like say "hydrogen"! Old industries do die and totally disappear, you know! Go look at the original Dow Jones Industrials, and see who's still in it? Dow-chemical maybe!
I hear what you're saying about you not comparing Enron to Sirius, as you were talking about the "averaging down bit"; but even in that case, I don't think it's a fair comparison b/c Enron had already "matured", and was already "in the profit". Much of Enrons PPS value was already priced-into the stock.
Sirius on the other hand, is just getting started. And yes, they may need another "injection", but I would imagine that it'll be a lot closer to CFBE (at 2,000,000 subs!) than not!
Even if Sirius doesn't get 1,000,000 subs by Dec. 31, 2004, I would suspect that it's 800-900,000 subs will give it a PPS a goodly bit higher than today's $2.78!
Nothing's for sure in the Market, but it does seem awefully strange for "all these affiliates/suppliers/installers/subscribers/ etc.etc.. to have it "grossly wrong".
The NFL doesn't easily give it's name to "failing ventures", neither does Chrysler, Mercedes, or Dish!
Sure, it could fail, as anything could, but...well, you get the idea!
I'm not comparing it to Enron...just trying to deflect the "old averaging down" argument. Wait...keep what you've got if you're confident but wait! The 600 million in cash is nice but will be gone in 18 months. The company will not be CF+ by then. I would expect some additional dilution and the only thing which will determine how much is the share price at the time it is necessary and it will be necessary. Nothing wrong with speculating on a growth stock but I wouldn't have more than 5% of my portfolio in SIRI...and that would be on the high side!