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Sirius XM Holdings Inc. Message Board

dukeufinstu 45 posts  |  Last Activity: 22 hours ago Member since: Dec 17, 2006
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  • Reply to

    Duke: Why--Part 4

    by dukeufinstu Jul 26, 2015 9:12 AM
    dukeufinstu dukeufinstu 22 hours ago Flag

    People have been making your argument on this site for a decade and nothing has happened. The problem is you just spout off stuff but you don't understand NUMBERS.
    SIRI has a market cap of 21B plus 8B in debt. Then the buyer would have to pay a premium to guys like you so of another 8B. That is 37B not to mention that it will take another B to put up new sats in 16 & 17. The company makes 1.4B in FCF but lets say it grows to 2B. That means in 19 years the Buyer will breakeven. Even if you assume 2.5B in FCF you are looking at 15 years for breakeven.
    If you understand numbers, which you obviously do not, you would be laughing at the buyout theory. You obviously have never bought a business but keep the faith. I need something to laugh at when work gets tedious.

  • Reply to

    never fails

    by redthecat1 Jul 27, 2015 11:39 AM
    dukeufinstu dukeufinstu Jul 27, 2015 12:26 PM Flag

    Drunken
    You don't want to tell everyone your a trader when you have been telling everyone you are a B&H guy. It is bad form.

  • Reply to

    Duke: Why--Part 2--The Cliff's Note Version

    by dukeufinstu Jul 26, 2015 9:37 AM
    dukeufinstu dukeufinstu Jul 27, 2015 1:56 AM Flag

    Repost

  • Reply to

    Duke: Why--Part 3

    by dukeufinstu Jul 26, 2015 8:53 AM
    dukeufinstu dukeufinstu Jul 27, 2015 1:56 AM Flag

    Repost

  • Reply to

    Duke: Why--Part 1

    by dukeufinstu Jul 26, 2015 7:53 AM
    dukeufinstu dukeufinstu Jul 27, 2015 1:55 AM Flag

    Repost

  • Reply to

    Duke: Why--Part 4

    by dukeufinstu Jul 26, 2015 9:12 AM
    dukeufinstu dukeufinstu Jul 27, 2015 1:52 AM Flag

    SIRI is a slow growth company that would hurt the metrics of most of the high flying companies that you see as merger partners. It is a radio station, not a high tech company so it has few merger partners. No one wants to deal with Malone.
    People have been writing the same stuff you have been writing for years but no one is interested in a merger. You are like a like a MLB fan who says maybe my team can trade three double A pitchers for Mike Trout? You simply are dreaming with little understanding the difference between low tech and high tech.

  • Continuation Of Thoughts From Part 1
    SIRI could not control the date on which the settlement was announced. The company has had a history of unexpected write offs. The DC NOLs, the Liberty BB that became a derivative. If SIRI was planning a write off the accountants would have had to have it planned and executed before 6/17 and the settlement then became a Q3 item.
    The WHY's in part 2. SIRI had 4 articles this week. Why so many? Second, we know that the settlement will negatively impact EPS and FCF in Q2 or Q3 depending on when it is recognized. No analyst has cut his Q2 or Q3 guidance for the stock. Rather full year guidance has been raised. Why? Bull trap for the unwary? Someone needing to unload a position? Anyone remember the Barron's cover on 11/24/13?

  • dukeufinstu by dukeufinstu Jul 26, 2015 9:12 AM Flag

    It would now appear that Part 2 & 3 have been deleted. There must have been some good stuff in there. We will make Part 4 short. As we go into the CC the issues that I raised in Part 2 & 3 should give you pause...if you ever got to read them. My personal opinion is that although one can expect a good report based on auto sales, the risk is that SIRI will cut guidance in Q3 based on the settlement in Capitol Records. If they do that, then Q2's numbers will be forgotten.
    Since that is a realistic possibility, I have no position in SIRI going into the CC. My view is that I would rather miss a rally or a sell off than to be guessing what the company may say on TU. If you read me three weeks ago, I told you that I had made a bad trade and bought a 150,000 share at 3.74. The investment strategy was hope. I didn't deviate from what I said I would do. i sold at 3.79 and was happy to pocket the nickel. I also shorted at $3.85 on the gap close that I predicted and took the penny profit when the stock failed to break below 3.81. Not all trades work the way you anticipate and I would rather have the capital back.
    The last CC saw SIRI miss by a penny yet the stock rallied the day after the CC and hit $4.00. I expect the CC to have something in it for bulls and bears and a nimble trader should be able to execute a swing trade in both directions.

  • dukeufinstu by dukeufinstu Jul 26, 2015 8:53 AM Flag

    Part 2 may have been deleted. I will go back and try and recreate it or give you a 4 sentence version to see if Yahoo will post it. Picking up from where I left off SIRI traded 93M shares on THUR and FRI but went nowhere. It is as though someone was using the articles to get out of a position before the CC.
    Phil Kowalski was back this week touting takeovers. You remember Phil...Duke you write about stuff that never seems to impact the market. This week the market sold off and everyone was citing China, the strong dollars that was hurting earnings and the implosion in commodity prices. Anyone recognize any of those issues? I have been writing about them for the past six months. As I said before, none of the issues I write about are an issue until they become an issue and then they become a big issue.
    The 24/7 Wall Street article said that appeared yesterday said SIRI's earnings protected from the woes of the world. Do you believe that? One of my favorite topics has been the growth of subprime loans in the auto industry. I have explained how the loans are securitized, bundled together and sold to investors seeking higher yields. They are known as junk bonds. The problem is the junk bond world is imploding. HYG and JNK are down 10% this year. The problem is not auto loans. It is the junk bonds sold by energy companies. There have been 5 energy companies that have gone BK with more to follow if oil stays below $50 The oil hedges expire soon so the full impact of the decline will spread. Throw in that Puerto Rico will default this week and no one is interested in junk bonds at the moment. In a few months sub prime loans will be scarce, auto sales will drop and an unanticipated problem will appear. It is all part of the credit cycle. You just need to give it time to mature.

  • dukeufinstu by dukeufinstu Jul 26, 2015 7:53 AM Flag

    It has been three weeks since Cracked Nuts wrote his explanation of the Capitol Records decision and I commented that he didn't understand the GAAP accounting rule for Settlement Day Payments and that the settlement was constructed so SIRI could take the expense in either Q2 or Q3. There were two responses. The first was that The Duke don't know nothing. Where have I heard that before? Ten days ago Wrongway wrote a piece about the upcoming CC and made exactly the same point I did (brilliant insight from the generator salesman) and no one questioned the validity of the statement. The second response to my statement was WHY would SIRI wait until the 3Q to report the expense. I didn't bother to answer. If they are interested they can join us on Sunday morning and avoid the endless drivel on SA.
    The question has a simple answer if you have ever been involved in multimillion dollar litigation settlements. The Duke actually started in practice as a litigator in a big LA firm so I know a little about the subject. There were five plaintiffs and each one had in house counsel and outside counsel who specialize in litigation. SIRI also had in house lawyers and litigation specialist admitted to practice in CA. SIRI proposed the settlement and then it was debated by the five plaintiffs. The were probably multiple offers and counteroffers back and forth. Remember the final agreement covers the period to 2022 and payments to be made past settlement. The lead attorney for SIRI and the lead attorney for Capitol would collaborate on the first draft. The problem is that it will be reviewed by 10 other attorneys. This will result in at least a dozen rewrites. Ultimately, you have to explain it to six sets of executives. More rewrites to deal with stuff that will never happen but they pay the bills so you nod while thinking how did this guy become CEO.
    The settlement was announced 6/17. Got any idea when it was proposed. My guess is 4/1 to 4/15. It takes that long to get a final draft.

  • Reply to

    Blueprint for SIRI merger with X?

    by philip_kozlowski Jul 25, 2015 7:04 AM
    dukeufinstu dukeufinstu Jul 25, 2015 11:29 AM Flag

    You should follow whatever investment strategy you deem best for yourself. If you like buy and hold rather than trading then that is best for you. My posts are aimed at those who trade the stock and you shouldn't be swayed by what I write.
    As to my position in SIRI, I don't have one at the present moment. If you are interested in the reason, you might want to read tomorrow's post.

  • Reply to

    Blueprint for SIRI merger with X?

    by philip_kozlowski Jul 25, 2015 7:04 AM
    dukeufinstu dukeufinstu Jul 25, 2015 9:38 AM Flag

    TCI was a cable business and Malone became convinced, after the sale, that cable was the wave of the future and he should have been a buyer, rather than a seller of cable. You are watching the culmination of that desire as Charter is trying to acquire TWC. He is also doing the merger approach to cable companies in Europe and Latin America.
    I never had a position in TCI. As for my positions in SIRI, my long time readers know that my long positions in SIRI outnumber my short positions by about 3 to 1. There is a time to be long in a stock and a time to be short. For the past couple of years SIRI has followed a consistent pattern of bouncing off support and resistance levels. If you know the levels, you can make money.
    If you prefer to ride the stock up and down, while cheering or crying on the sidelines, then feel free to do so.

  • Reply to

    Blueprint for SIRI merger with X?

    by philip_kozlowski Jul 25, 2015 7:04 AM
    dukeufinstu dukeufinstu Jul 25, 2015 9:13 AM Flag

    You do know that Malone says the TCI deal was the worst mistake he ever made and if he had it to do over again, he never would have sold. You might want to try another example or at least read something about JM.
    You know what, you may even be in my post tomorrow.

  • The great thing about the Greek fix is that it is so complex that no one understands it including the participants. The whole idea is to fool the markets for a while and keep the great Ponzi scheme going as long as possible. So everyone knows that the Greek PM agreed to this nonsense after 17 hours where everyone told him he was an idiot. Europe won the negotiation but had no idea where they would get the money to fund the deal. Good Planning. They finally made a 7.16B loan from the EFSM on Fri. The EFSM was a temporary fund that closed a couple of years ago when it was replaced a permanent fund But the EFSM still had unused lending authority so it was tapped. Only problem was that England was part of the temporary fund but not a part of the permanent fund so when the loan was made out of the "closed" EFSM, England was on the hook for a billion dollars. They protested and were told to stick it. The 7.16B was added to Greece's tab but the money will be paid directly to the ECB to meet Greece's 3.5B debt, a 1.6B debt of the Greece National Bank for printing those unauthorized Euro's and 2B for the IMF to pay "the arrears". The ECB put 900M into the Greek banks this week but the by the time the final agreement is reached in 4 weeks the entire 5B will be in the bank sinkhole. Greece is supposed to put $50B of property into a fund that will sold to pay down the debt. The finance minister says they don't have $50B but they will put something in the fund, overvalue it and everyone can be surprised when the sale nets 10B. The IMF says Greece can't pay back $320B so Europe needs to write off debt. Europe says no debt write off. We will loan it another 85B and no one will notice that it won't be paid back. Two weeks ago the Greek bailout was 55B. It is now $85B because no one is paying their taxes. Yesterday, Parliament passed a bill delaying income tax filings for a month. Any idea what the hole in the budget will be in four weeks? North of $150B. Yep, it is all fixed.

  • So how do I know that SIRI made the payment and why wasn't the date reported. The settlement was a MATERIAL fact that impacted on the financial condition of the company and as such SIRI was required to file an 8K with the SEC. It didn't matter that no one understood it except The Duke and Wrongway. Wrongway should have told CN he was an idiot before I did. But the payment is considered a ministerial act so it doesn't have to be reported, thus we don't know the date...and JM wanted that way. But I also know that the payment was made or there would have been another 8K filed, (MATERIAL FACT) saying so. No second 8K, so payment made.
    So how was the payment made? One of two ways. The payment could have been made into a fund that the Clerk of Federal District Court maintains to hold funds but I doubt that is what occurred here. Those accounts are not meant to hold $210M for extended periods of time. SIRI's banker is JPM and so SIRI, Flo and Capitol probably agreed that SIRI would create a segregated account at JPM where SIRI paid the money into the account and gave up all rights to it. JPM would hold the funds in an interesting bearing account until a FINAL decision was reached and then pay it out according to the final decree. All the parties and the judge would have to agree to the arrangement. The day SIRI transferred the funds to the segregated account would be the payment date. There is a lot of legal work involved..messy legal documents and fights over wording and a judge's approval...leading The Duke to believe that we are looking at a Q3 event. You will note the term final decision. The District Court will make the initial decision but this is headed to the 9th Circuit for a final decision so SIRI's money won't get paid out to next year...and Wrongway will be discussing all this in his next article.
    Greece got fixed this week. It was on CNBC except Greece got a little payback that no one noticed. Part 3 will explain the payback.

  • Some of you may wonder if The Duke ever has an impact on the world. This week we got our answer. Last week I mentioned that Wrongway hadn't written an article in a few months and that I hoped I had something to do with that. This week Wrongway wrote his first piece since May 4, entitled Is Sirius XM Setting Up For A Significant Move. I urge all of you to read the article since Wrongway can use the click income and he presents an interesting cup and handle analysis that will make you feel good.
    A few years ago WW asked Wrongway whether he ever read The Duke and he answered no because I only dealt in things after the fact and he found that uninteresting. That helps to explain why I can be so hard on him. I can say whatever I want without hurting his feelings. Anyway, if you read the article you will find that he discusses how the SIRI option to report the $210M settlement in Q2 or Q3 exists and thus muddies the water on the upcoming CC. He also reminds readers that he explained the first Q miss...SIRI opted to report the DC tax law change on NOL all at once rather than spreading it out over the year. If you remember CN blew the discussion of the settlement and I'm the only one who ever discussed the DC tax law change, you might wonder how a generator salesman figured out this stuff if he doesn't read me. Mental telepathy. He actually knows what I'm going to write before I do it. I just wish he would figure out a way to write it before I do so I wouldn't have to bother you on a Sunday morning.
    It is past 7/15 and SIRI made the payment on the $210M settlement. We know the payment was made. We just don't when it was made so the Q2 v Q3 is still an open question. You should be asking how do we know it was made, why don't we know when it was made and how could they have made the payment if Flo & Eddie and Capitol Records are still fighting over the trust fund issue. It all has to do with segregation...that is still alive and well in the legal system.

  • Reply to

    The Duck is cooked !!!!!

    by spic_liberal Jul 17, 2015 11:12 AM
    dukeufinstu dukeufinstu Jul 17, 2015 4:09 PM Flag

    The Duck has been cooked many times but still tastes delicious.

  • I see I have more space and another reader question. This one comes from gpeter who says he reads me all the time, owns 86,000 shares of SIRI bought at 10 and 33 cents. He is a buy and hold guy. Is SIRI still a good investment and when will it hit $5.00 and $10.00 Looks like another myth buster to me.
    Let's start with when will SIRI hit $5.00? First let's visit our resident genius over on SA. Back in Mar. 2014, Wrongway predicted SIRI would hit $5.03 by the end of the year. When the stock headed toward $3.00 which some other writer predicted, the esteemed Wrongway cut his predictions to $4.80 and then $4.50. Since he is writing comedy, he followed up that tour de force by writing a 6 year projection of SIRI's price in Feb. 2015. We are going to finish the year between 4.80/5.80 he said and by 2021 you will see 19.80/21.80. He doesn't write much any more. I hope I had something to do with that..toxic waste cleanup.
    The short answer to you question. I don't see it hitting $5.00 in the foreseeable as in two to three years. Why? 1. The loss due to the lawsuits. 2. Slowing auto sales in the second half of this year. 3. Uncertainty over Stern. 4. Investments in new sats in 2016, 2017 that will cut FCF. 5. Investments in Agero that will cut FCF over next 2 years. 6. A massive correction in the stock market in the next 18-24 months. You are likely to see $2.50 before $5.00.
    You obviously bought SIRI in 2009. It was a good investment then. You failed to understand that it stop being a good investment at the end of 2013. It has gone nowhere in 18 months. Closed at 3.50 on 12/31/13. In 3/14, I announced on this site I was selling out my holdings and would only trade the stock. Some day SIRI will hit $5.00 but you will still be a loser. Money has a time value/opportunity cost. You could have taken the proceeds and made more money in some other stock rather than waiting until 2018 for $5.00 in SIRI. You don't want to wind up like Drunken watching that escalator going up and down

  • Last week I told you that SIRI was headed to $3.63/3.64 and that after one or two tests of the $3.65 range we we likely to test the 3.48-3.52 range. I also said that the first test of the 3.65 range could take place on Mon. Sure enough we hit 3.66 on Mon and rallied back to 3.74 on Tue. Wednesday, we hit my $3.63 and by Fri we hit my target price of 3.75. For those of you who remember our old friend Flabby, we corrected down 23 cents ($3.86-3.63) so the retracement back to $3.75 was a perfect 50%. News developments should tell us whether we get a 61.8% retracement back to 3.79/3.80 or a retest of 3.63. If we get the retest we shall see if it holds or if 3.50 is in our future.
    I mentioned Phil Kowalski last week and the buyout myth. Phil also had a criticism of The Duke back on 6/7. He said you always seem to be talking about how Greece and China are going to be impacting the market but they never seem to do so. If you read The Duke you need to know I talk about things that will take months to develop. You need to give things time to mature. What I write about doesn't impact the market, UNTIL IT DOES IMPACT THE MARKET, and then it does so in a big way.
    A quick take on Greece. Syriza's proposal is a sham. It was put forward to get the EU to recapitalize its banks to the tune of 25B. The other 50B would be loans to repay the Troika over the next three years. During the past 5 months the Greeks have withdrawn $40B from their banks which has been funded by the ECB through the ELA loan facility. The idea was to see if the could help the dumb depositors get another 60B out before the EU wised up. Fakem at his best. Looks like the Germans woke up to the plan so we could have fireworks tomorrow.
    Do you believe the that the EU has put up firewalls to protect against a grexit? The firewalls protect the institutions NOT THE BANKS. The banks have written default swaps (CDS) against Greek debt that is about to be worthless. If a bank is in over its head, it will be 2007 again.

  • There was another development in the Caoitol Records v Sirius litigation saga that no one reported because no one understood its implication on SIRI's intermediate term PPS. Let's start with what happened. The attorneys for Flo and Eddie filed a motion in the Capitol Records case asking the judge to put the $210M settlement into a trust fund rather than paying it out to the plaintiffs. Flo and Eddie seem to think that they may be entitled to part of the proceeds as third party beneficiaries. They are asking the judge to freeze the payout in a trust fund until their lawsuit is decided. I don't want to get into the merits of the motion except to say I think it should be denied.
    But what is important about the motion and how may it impact the PPS. If you remember when the decision was announced I explained to you that SIRI would be taking about a 155M charge against earnings and although the company might characterize it as a one time charge, the impact was so large that I expected it to wipe out earnings for the Q...a nice way of saying SIRI would report a loss. The open question was whether this loss would be reported in Q2 or Q3 since the settlement stated that SIRI had until 7/15 to make the payment.
    The Flo and Eddie motion was filed shortly after the settlement was reached but the judge has yet to rule on it. From that I am inferring that SIRI has yet to make the payment because if SIRI had made the payment prior to the motion being filed it would render the motion moot. Getting rid of all the legalese, it means that SIRI will likely record the payment as an expense in Q3. The analysts have failed to warn investors about the upcoming quarterly debacle so this is going to come as a complete surprise. The shorts understand what is coming which explains why the stock has fallen from $4.00 on 5/29. The problem is that if the loss recognition is put off to Q3, the stock could be sitting at 3.20 by the Oct. CC and 2.90 would be a possibility after a "surprise" loss.

SIRI
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