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Sirius XM Holdings Inc. Message Board

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  • bushmanalltx bushmanalltx Nov 18, 2007 9:56 AM Flag

    Question For You Predicting $6.00 Merger Price

    SIRI pps post merger will be largely influenced by the analysts re-crunching their numbers for the new company. It's very likely we will see a pop to possibly $5 but the pps will correct down after the day traders sell and wait for upgrades and new guidance from the analysts.

    Bushman expects JJ to low ball once again with a 1-year target around $3.50 while the rest of the analysts issue price targets in the $4.50 to $6.00 range. Further upgrades can be expected once SIRI begins to show a profit.

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    • Bushman

      We agree that once the merger is in place more analysts will get on board.

      Your numbers and analysis seem to be on the money!

    • Bushman expects JJ to low ball once again with a 1-year target around $3.50.... Maybe this is why JJ is sticking to his 3.50 target. Siri MCAP 5.19, Xmsr MCAP 4.39 + estimated synergies 3B) = 12.58B MCAP (merged). Post merger outstanding Siri stock (1.47B current shelf for merge 1.9B=3.37B shares - xm outstanding .34B(will no longer exist) = 3.1 billion shares) 12.58 MCAP/ 3.1B shares = 4.19 PPS. If ya use 2 billion savings/synergies then ya drop to
      11.58B MCAP/3B shares= 3.86 PPS. Who realy knows what the actual savings will be. Those are the analyt's estimates.

      • 1 Reply to lineblock
      • The increase in market cap will not be solely based on synergies. The market cap will also be increased based on the assumption of much larger net sub adds and more rapid eps and revenue growth. Once the eps turns positive it will continue to rise at a rapid pace. Remember, companies with rapid growth get a higher valuation than those with slower growth. BTW, your $3B figure is at the low end of analyst estimates. I've seen estimates as high as $6B. Let's use the midpoint of $4.5B in synergies and compare it to the current combined market cap of approximately $8.5B. The ratio is staggering. Imagine if you could merge say an HPQ with an AAPL and gain $150B in synergies with their combined market cap of $275B. So you can see how this ratio of synergies to market cap is phenomenal, not to mention a faster pace of revenue growth.

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