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Sirius XM Holdings Inc. Message Board

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  • mardermj mardermj Dec 10, 2004 1:58 PM Flag

    Did XM Get a History lesson 18 mo.s ago

    The rationale on behalf of XM was the OEM deal--SIRI had sunk near bankruptcy level and was allowed to refi its debt and got an infusion of cash--

    SIR has these hurdles-inclusion of SIRI at the factory not an option--the working of retail sales one on one at RADIO shack in lieu of these factory install slam dunks, and Clayton's tendency to sell shares everytime he needs talent using essentially your money to do so.

    These are punishing minus for a company and stock.

    XM is in better shape, close to CFBE cash flow break even in about a year and a half, SIRI probably wont see that until 2008.

    The farther away you are from profitability and the harder your model to execute, the lower your stock price and the more risk reward ratio--the establishment of 9 at the high side and 6 at the low will leave us in much the same position as XM last year--in wait and see mode.

    Sell some covered calls against your stock every quarter to the gamblers while you wait.

    A March 7.5 call goes for $1.40--Shares margined fifty percent at $3.75 out of pocket, actually $2.45 out of pocket once you get the option sold, will garner $1.35/$240 or over 50% in ninety days, every ninety days.

    There's lots of money here if you play it correctly, and it doesn't have to be pure long or short.

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