The final reason why SIRI's price fell last week is the 302M share forward contract. JM has said that he plans to settle before 7/6 and I fully anticipate that he will. I think the chances that he won't are like a gazillion to one. But the market prices in every eventuality and if for some reason he didn't settle, the bank that aggregated the shares would dump all 302M shares on the market creating an incredible one day price drop and the best buying opportunity since that 5 cent deal. If JM had asked The Duke I would have told him to settle within 7 days. But JM is much smarter than The Duke. Ask him, he will tell you it is so.
Like you I have wondered whether there is a connection between Mel's planned sales and JM's takeover. Give it some thought and see if you can figure it out.
Frank has been bugging me all week about my favorite movies. My favorites change every week. This week I like Gun Fight at the OK Corral and Collateral Damage. It is an acquired taste. I hope you will get to view them in the not too distant future.
JM is letting Mel milk the dog before he Jm settles the shares...
And Mel is in cahoots with the deal as he is just blowing smoke at existing diehard investors long enough to get his cut...
Then w/o further adou mels adiose this sucker...
JM will do the R/S after liquidating the share price and longs will lose a majority of their interest...
JM is also going to use existing investors to clean up some of the toxic debt throughout this managerie....
ITS a TOAST for the LONGS whe all is done...
And the fat cats will get theirs and roll on...
sounds like Duke wants movies (or TV) pushed down to SIRI folks......hmmmm but we all know that has been in the works for some time.....
Mel's dumping is his exit plan I doubt he renews......which I dont blame him.....no spring chicken
I still think the NOLs are key....when they are gone Liberty makes the move, Mel bows out BUT not before spending some of the cash on hand.....
none the less interesting!
Since I already responded some in part 2, I won’t rehash anything there. Nice recap of the SIRI sell off. Fortunately for me, it’s happened without me – well, other than my core long shares I still have no intention of yet selling. If I think JM is taking the stock to ZERO, then I’ll have to consider it. But at 30c and a lot of trading gains over the years, I see it as I still got a lot to work with to watch this story unfold as planned long ago.
While I’ve watched F and GM tank in recent months as well, I saw the price action moreso relevant to the economic distress coming out of Europe. They can’t catch a break. The US is trudging along, higher again into its third year of a typical 5-7 year expansionary auto cycle, and they get crushed by Europe. I don’t see US auto sales slowing down quite the same way for the rest of 2012. I still see pent-up demand staved off from the years of our recent depression. Take my family for example. The WW’s still drive 01 and 03 models with no intention of trading them in unless of course they die – and that could very well happen to one if not both of them in the next couple years. BTW, GM is already down to 79 days as of 4/30 from 86 on 3/31. Let’s update those numbers…just sayin.
The SIRI technicals now look awful. Support didn’t last long at the 200 DMA. But at least the MFI and stochastics are now oversold. I tend to believe that a crash is imminent but I think the reason is more like an excuse to sell. Valuations are still very attractive and if the US market has any earnings growth whatsoever the rest of the year, the market sure isn’t telling us so. Also, the retail investor got it wrong by selling out of the market to close 2011. Yet they still keep selling in 2012. If the goal is to get everyone out of the market, I say mission accomplished. My weekend gatherings with regular folk still tell me just the same…nobody likes the stock market. Even they knew that FB would be a disaster before it hit the tape and proceeded to tell me all about it over the weekend since they know I watch this stuff a little closer than the average guy. Regular investors are still apathetic to the stock market. They are buying bonds, gold and guns. Will the Bears really tank the market and let the retail investor get it right. Doesn’t sound like their game. But if these Europeans don’t get their act together soon, they may not have a choice. I’m pressing for another precipitous decline in the market but I have a sneaky feeling that much like the start of the year, I’m going to miss a few points waiting for it to happen first. At least I hit the sell button at 1400 so I have a long way to go before I have to chase anything.
Funny, if I go back to that same Jan/Feb post timeline to LR, my 2012 prediction went something like this…buy dips til May, Sell in May and re-evaluate at the FB IPO. If excitement comes in and some HFs were left behind, look for market chasing to keep the rally going before a sell off in time for the election. If no excitement, look for a summer swoon that could get ugly…a US election gone wrong, tax cuts expiring, you name it before a late year rally – IF it becomes apparent that the US election is going to go right and that tax cuts get extended. Oh, and those HFs didn’t miss much of anything as it would appear they performed pretty well in 1Q. I think it’s very telling in SIRI that now nobody is willing to play this side of the Arbitrage game. If nobody wants to play a guaranteed game then something is very wrong on the Bid side.
Going to add a few more notes.
1) Call it A New Signal. Last August (8/18 to be exact), the MMs gave us a gap signal to shoot at: 1.87-1.91. Meant you could buy anything you want under 1.87 knowing amidst the mayhem that we would return to 1.91 at some point in the future. The stock then proceeded to collapse all the way to 1.27, but all along you were in good hands if you had the stones to buy the stock as most Duke fans did. Here we are again, with a new signal on 5/14…a gap at 2.11-2.12. While we may collapse further from here, much like we did in 2011, you can bid with confidence as the stock will return to 2.12 at some point in the future. That is, unless you think the stock is going to 0. Guess that buy anything under 2.10 wasn’t a bad idea after all. Seems as if a collapse could be on the horizon once we test the wrong side of the 200 DMA. The Dual Threat writers on Stupid Alphabet and The Street have the full court press on to make sure we all sell our worthless shares once and for all. Great work on their part. Nobody sold this AM. Those guys are worth less than SIRI. Worst copycat advice around but you come to expect it outside of The Land of The Duke. At least I give credit to where it’s really due.
2) The SELL imbalance orders were back in a big way at the open on Fri and today…more than doubling up on the imbalance sell orders at the beginning of May. Shorts stacking the deck or Longs running for the exits. Or both.
3) Will Mel or GM have anything to say that moves the stock in either direction tomorrow or Wed, or stiff us with more of the same Options Speak. When does that darn cat come out of the bag.
Frank – Duke hasn’t responded to you about selling his Long shares because he ain’t. Maybe I’m dead wrong but that’s my read by his lack of response. So until he claims otherwise, we’re left to read between the lines.
...but hindsight is the only accurate perspective. Wait, actually that is not the case. History is rewritten daily.
I guess there is some real value to some in having 'what has happened' explained. If a person/investor reads enough of this, it can help understand the different potentials/paths that exist. Build open-minded approach, if you will. In some cases, it can/will indicate the intentions and/or attitudes of the players in a CURRENT situation and allow more accuracy in 'guessing' the next action.
There are numerous texts saying we did NOT win WWII. I totally dissagree with that line of thought, but there is a lot of interesting information mixed in with the assertion. Knowing that information causing a person to question motivations of current/future wars and be wary of propoganda.
Ok, I watched Margin Call last night and had fun watching. Sell, sell, sell,...anyway. Hum, I might be looking for a new car in the fall. A few dumb questions.
1) Wouldn't the bank that accumulated the shares then be able to then sue JM for a breach of contract besides just selling all the shares if he doesn't make the date?
2) Eventually to take their 50.1% control doesn't Liberty have to do the actual 40% conversion from the perferred to the common and then won't that conversion end up dilueting the SIRI base outstanding?
3) I know we should all be Cautious here so we don't end up in that roadside ditch or have to sell our hair to a wig shop, but the ECB & Fed did it before and maybe they do it again? Keep inflating asset prices and kicking the can down the road. People want to believe that story just like they want to believe little Stevie Wonder. Even Doug Kass had turned optimistic on the market. Maybe they actually fix things...but not until after another fire sale... just maybe?
Maybe this will help with the first one. Duke pointed me to this at oneoint during the week. Cash settlement. It's a good listen. I think it's is talked about in the first 15 min. I'll let the professor explain it.
and as you state, a recession in American much worse than 2009, what levels do you see as support with respect to SIRI, DOW and the SP500?
Will the DOW hold 10K?
What troubles me is, if the market gets hit that bad once again the retail investor may never come back.
Oddly enough, Tombstone daily NUGGET had a reporter there.
The titles fit in nicely, I'll have to watch again to see who are the 'Earps' and who are the 'Cowboys'.
I just hope I am wrong about who is the Collateral Damage.
Why come and give armchair analyst
Investors wan't your forward looking deep thoughts
My hunch is Mel negotiated a time frame for JM to buy up Cheep shares Pryor to 22nd & 23rd
Care to cover Fridays action
Movie ( Mighty Ducks )