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Sirius XM Holdings Inc. Message Board

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  • lukb4ujump lukb4ujump Mar 16, 2012 2:00 PM Flag

    $100 PER SHARE: A TIMELINE

    25-100 per share would give Sirius XM a value of

    156.25 - 625 Billion market cap. What the hell are you smoking?

    Even at a multiple of 15:1 Free Cash Flow SIRI would need to be generating 10.42 - 41.67 Billion in cash flow based on today's numbers

    Even if they were able to pay off all debt and buy back 50% of the float over the next 3 years. You would still have 3.125 Billion shares. At 25-100 per share you would still have a market cap of 78.125 - 312.5 Billion dollars.

    At a multiple of 15:1 Free Cash Flow lets say with all the debt paid off and we have grown to 4.5 Billion a year in revenue at 2 Billion is not going to the bottom line (pipe dream for that short a period but lets go with it). That would give Sirius XM a market cap of 30 Billion just under 10 bucks a share.

    Sorry to rain on your parade but that sets the bar just to high and is not reasonable for such a short time frame. Don't get me wrong would love to see that kind of price. But those a pipe dreams.

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    • At 25-100 per share you would still have a market cap of 78.125 - 312.5 Billion dollars.

      ***********************

      Which is par for a media company with global penetration via a giant telecomm like Verizon. 78 billion seems about right but this will trade ahead of itself on speculation and high growth rate. There is no saturation in sight on the satellite spectrum. Diff. story with wireless bandwidth.

      Squeeze

      • 2 Replies to sirius_squeeze
      • The fact that it is a media company is irrelevant, no such thing as "par for a media company". A stocks valuation is based on its earnings power and its future earnings potential. ROI, ROE, Cash Flow, Profit do factor into a stocks valuation. If you were out looking to buy a house today and the current market value of the house is 240k, would you pay 850k for the house because in the future it could be worth 10 million because it will be surrounded by a future city? No way to measure that. You would not even pay 300k for the house, you would try to buy the house for under market value to get a good deal, say 230-235k.

        To sustain a market cap of 78 Billion Sirius XM would need to be generating or would be generate in the foreseeable future 5.2 billion a year in free cash flow at 15:1. At 20:1 the free cash flow would need to be 3.9 billion.

        No way Sirius XM will grow their free cash flow to 3.9-5.2 billion a year in 5 years. That means they would need to increase their cash flow 400-600% in three years. We would need over 60-80 million subscribers. What is going to happen in the next 3 years that will spur that kind of growth? or How much more would the price need to go up over 3 years to get the top line revenue up over 9 billion.

        Only way that happens in 3 years is HYPER INFLATION and at that point minimum wage would be 25 bucks or more an hour.

      • VZ does 111 Billion a year in revenue.
        112 Billion market cap
        2.84 Billioin shares outstanding
        35.3 Billion in EBITDA
        2.4 Billion available to common.
        Pays 2 bucks a share dividend, a 5.1% yield.

        Not even in the same ballpark today, could we get there? It is going to take more then 3 years to get there I believe.

        2012
        1.5 Billion end of 2012 - 300 million pay down debt
        1.2 Billion ending cash position
        2.7 Billion ending debt position
        6.35 Billion shares (3.76 Billion + Liberty 2.59 Billion)


        2013
        1.2 Billion starting cash position
        1.0 Billion in free cash flow
        2.2 Billion end of 2012 - 778.5 million takes out the 2013 toxic debt, now buy backs are not restricted.
        1.42 Billion - 750 million share buy back 2.75
        672 Million ending cash position
        1.95 Billion ending debt
        6.08 Billion shares (3.49 Billion + Liberty 2.59 Billion)


        2014
        672 Million starting cash position
        1.3 Billion in free cash flow
        1.972 Billion end of year - 550 million note 2014
        1.422 Billion - 750 million share buy back at 3 bucks
        672 Million ending cash position.
        1.4 Billing ending debt
        5.83 Billion shares (3.24 Billion + Liberty 2.59 Billion)

        2015
        672 Million starting cash position
        1.7 Billion in free cash flow
        2.372 Billion end of year - 800 million debt 2015 8.75% Senior
        1.572 Billion - 750 million share buy back 4 bucks
        822 Milled ending cash
        600 Million ending debt
        5.64 Billion shares (3.05 Billion + Liberty 2.59 Billion)

        In 2015 with price of 4 dollars a share, SIRI would have a 22.56 Billion market cap, or 22.56:1 Price/Cash Flow.

        I just don't see your 78 Billion, in three years...

    • Do you think AAPL will ever reach $1 Trillion?

 
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