By Brandon Matthews
I never imagined myself spending this much time writing about a thirty-four cent stock. I cannot begin to describe the insanity that the current stock price represents. As I am researching Clear Channel’s (CCMO) impending demise, I am again forced to recognize the potential advantages this represents to Sirius XM Radio (SIRI).
Unfortunately for Clear Channel, there will be no government intervention to speed up bankruptcy proceedings. Clear Channel Communications owns and operates more than 1200 radio stations in the United States. As we have learned from the recent restructurings of both General Motors (GMGMQ) and Chrysler (DAI), restructurings tend to cause, at a minimum, fallout in the form of weak links. The 1200 radio stations owned by Clear Channel are no different than Chrysler or GM’s network of dealerships.
In the likely event that Clear Channel does seek bankruptcy protection later this year, and the unlikely event that the company can reemerge from that bankruptcy, there would inevitably be a substantial loss in the 1200 Clear Channel owned radio stations across the nation. This will inevitably lead to less terrestrial radio coverage. Many faithful local radio listeners will be left in silence. This will, by default, lead to new opportunities for Sirius XM Radio to increase its subscriber base.
As we have discussed on multiple occasions on Satwaves, this may be the event that leads Sirius XM Radio to adopt an ad-based service to compliment its premium subscription service in the future. It will also likely provide a substantial subscriber base increase in the form of a’ la carte programming. Of course, the game still has to play out to its final outcome.
However, I cannot help wonder:
If the market is supposedly forwarding looking, why can it not see the forest in front of it? It must be those darn trees.
Position: Long SIRI
I was watching my local news last night and jim gardner (phila) said that they will no longer be on regular radio because of the dtv digital transfer.Another nail in clear channels coffin!
The world market for late model US autos already sat radio equiped shall generate revenue and the iphone is a globally desired item,lets not forget the up coming russian launch as well,starting to see?
Siri xm is here to stay and shall only continue to grow as a company and a great stock,The negative outlook comes from scorned investors angered (And rightly so)about the mismanagement that has ran rampant prior to the intervention of John Malone that resulted in tremendous losses for shareholders, but the Doctor is in and he has stopped the bleeding, performed surgery and has begun rehabilitating the patient!
The paramount problem for the stock price is the lack of confidence that comes from a lack of public relations and disclosure from management.
I rate this stock as a strong buy in the thirties and its proven ability to sustain in this area clearly illuminates a bottom,Now is the time to aqcuire as much stock as one can tolerate because growth is imminent!
If you are a former shareholder who lost and sold,Now is the time to reinvest and not only recoup your losses but attain some long over due gains!
If you are a first time investor dont believe the misinformation and commentary this company is on the rebound.
Sure,we have had a drunk captain at the helm for a long time and yes while we may have run aground on his watch we did not sink and with hard work we managed to get off the reef and have been repairing the damage and are getting ready to set sail once again.True we still have the same drunk captain and while he may be on the bridge he is at the helm no more.
What I know of Malone is that if he has to shove his arm up mel’s A#@ and operate him like a sock puppet to get results he is prepaired to do so!
But hey I am only holding 10mil shares common and shorting 1-3mil daily so what do
I know right?
cordially,
chairman-ceo
http://finance.yahoo.com/news/GM-signs-up-over-95-percent-rb-15511112.html?sec=topStories&pos=8&asset=&ccode=
BRANDON, did you have a wire on NEWMAN OR DEMAIN last night????? My thought VERBATIM
Sometimes I don’t know wether its we Sirius Longs who see the world of Sat Radio thru Rose Colored Glasses or Wall Street/Media who sees Sirius thru Feces Smeared ones.
Like Brandon I’m a member of the former….but GOD DAMN if the later group isn’t in complete control of this stock. It pisses me off man. We all seem to be waiting for the day that the Media and Wall Street wakes the F up….and that day never seems to come. No matter WHAT good news stares them in the face….they just REFUSE to see it. It’s like this MASS HYPNOSIS or something. I’m sure they say that about us die hard longs…but come on. We longs DO acknowledge BOTH sides at least. We see the challenges and we get pissed at management. But we ALSO see the HUGE upside. The GOOD news. We see the WHOLE picture. It’s not blind devotion to a losing stock.
If anyone is blind, it’s the OTHER side…who seem to go out of their way to cherry pick facts that ONLY support their negative view. They absolutely have an agenda and have controlled this stock for so long it makes me wonder WHAT THE F@#K it’s gonna take?!!!
It’s almost as if whatever good happens they completely ignore or spin to sound bad.
I’ll tell you this tho….they’ll have to pry my shares from my cold dead fingers….because I’ll be damned if I held firm thru the merger delay, thru the BK and RS fears, thru the auto meltdown and economic crisis to SELL now. No way. And neither will most like me. We’ve taken their worst. We didn’t panic sell when Sirius was naked shorted down to .05 cents…and instead AVERAGED DOWN by buying MORE.
F those mutha F’in shorts. They will LOSE. I don’t know how or when….but It’s almost not about making money anymore….and more about seeing the shorts burn in their own greed. I know in my gut, it’ll be their turn to fry….and I can’t wait for that day it truly begins. When some catalyst sparks the fire that wipes the shorts out in one glorious pyrotechnics display.
Wats Dat Smell? It’s the shorts burning…
Brandon…
This may be your best article. And no trees were hurt in the process. Well done.
I HOPE THAT ALL THE SHARES BOUGHT SHORT ARE NOT BEING SAVED FOR AFTER THE REVERSE SPLIT (IF IT SHOULD HAPPEN BUT THE SIDEWAYS ACTION IS SCARING ME)
WHY WOULDNT THEY CASH IN AT 5 CENTS.HMMM MAKE YOU WONDER. I HOPE IT AINT WHO I THINK IT IS HOLDING THESE SHARES.YOU KNOW SHORTING AFTER THE SO CALLED REVERSE SPLIT ONLY TO SELL TO ATT OR DIRECT TV FOR 3 DOLLORS A SHARE WICH IS ACTUALLY 30 CENTS.PLEASE GOD I HOPE IM WRONG. LONG 10K AND PRAYING
Mike that is a legitimate fear and one that many longs have contemplated as a possibility. The RS was voted on and extended until July of 2010 which also takes some pressure off of those fearful that it would happen by the original December 2009 deadline. So we have some breathing room. ALOT can happen between NOW and THEN. The auto industry could begin to recover. The Sirius iphone App will be released. There are multiple quarters for Sirius to continue to show synergy savings and growth.
This game ain’t over yet boys. So Mike, the ending is FAR from being written in stone. Yes…we ARE trading sideways. But you can also look at that as a good sign coming off the last quarter that the media ONLY focused on the negative side.
Lets wait to see what kind of movement we get AFTER the iphone App is announced in a couple of weeks.
Brandon, I’ve been proposing for a long time of a tiered format w/ the low end being a commercial based offering for free or close to. But what I also see is that Wall Street might be looking at the demise of Clear Channel as the demise of all and any types of radio formats. That may be the reason for their dark colored glasses. It’s their mistake if that is what they are thinking of the future for any type of radio. This brings up my point of why Sirius Xm should react as soon as possible to compete w/ the Am/Fm formats head on. Altough we all know advertising dollars are weak at best because of the economy, but that should not stop Sirius Xm from moving forward with this tiered format. Their will be a void coming up if Clear Channel files BK and Sirius Xm should already be in place to speed up not only the BK but to seize the moment to pick up the listenership that will need their services. Turn on these millions upon millions of idle radios and empower them to put Sirius Xm in the mainstream. Again as I’ve said many times before Sat Radio is still not understood or appreciated by most people because they are simply unaware of the product. That’s why they need a tiered system asap. Forget Wall Street!!! It’s up to Sirius Xm to show Wall Street that they have a viable product that will sell. They have dropped the ball and so we want to blame Wall Street? I don’t think that is the way it works. If they were taking advantage of their potential market they would be a Wall Street darling! The time is now.
still buying, but not trading…. nothing against you guys that do, but the best option here IS to watch the fundementals, & not the charts. They need to cut costs & find a way to edge up revenue-that is exactly what they are doing. Screw the sub numbers, watch EBITDA & FCF – row thru the rest of this storm. I phone will help, so will refi on a certain piece of convert debt (which is in the works right now); 1,520,000 long and waiting – I have all the time in the world… I am not impatient with this in any way, nor am I unhappy with management.Management is fine and the advertising decisions that have been made are correct. Watch, Just sit tight and watch this – within 3 years, it will be a great story to tell the kids… We saw the sun set really quick last fall- it will rise again the same way & some of the shorts will not get out in one piece. The real money players in this equity have already have already gotten an enormous amount of retail holders to to believe them instead of their Lying eyes and sell for what will ultimately turn out to be nothing in the context of what is coming. The biggest problem with day trading is that it absolutly breeds the impatience, irrational behavior, and herd mentality that suits the MMs and their bosses to a tee. Read the bash pieces on SIRI, they are mostly implausible to anyone with a calculator. Just hold tight and stop trading (excluding big jumps) and win the fing game
Krypto1-
I agree with you. It costs a lot of money to advertise, and in this horrible economy the amount of subscribers gained would not be as much as usual. So, EBITDA and FCF are more important now simply because in this economy gained subscriber numbers are so hard to get. The higher the synergies savings Mel is able to report quarter after quarter (and likewise earnings, the higher sentiment towards SIRI will be. If Sirius XM were to gain another few hundred thousand subscribers at the expense of profitability, that would be a great negative to sentiment. Also, it would make the company less financially secure. We all need to take a longer term view (yes, I know there are lots of “competitors” out there, but we have a great product). Once the iPhone and other applications are available, EBITDA and FCF are positive, and consumer sentiment is on a continual uptrend (as opposed to a shortlived rise), that will be the time to advertise the hell out of this thing.
Hi Brandon!!
“I cannot begin to describe the insanity the current stock price represents”
Just really says it all…….I am totally dumbfounded and flaberghasted!!
Best Content in the World……by Far!!
Best Delivery System in the World…….by Far and getting better with the New Bird this month!!
Ready to move from an “Automobile based OEM” to a “Handheld OEM Model”…..
20 New Internet Stations……more coming I am sure.
And we sit and go back and forth around 34 Cents……
Replacement Cost and Content Value Alone make it worth about 10 Times the Price!!
Totally Ridiculous……..Wall Street is missing this one!!
All The Best to the “Long and Strong” Crowd!!
Mark Allen Harris
I have a question tho. People like the poster above praise Sirius as having the BEST delivery system in the world using Satellites….and then also go on to say that Sirius is ready to move from an Automobile based OEM to a Handheld one which will use wifi and cell phones.
Which is it? Which is better? Using Sat Radio technology or Cellphone and wifi for delivering music?
I Think with the new more powerful satellite ever built they will be able to stream wi fi right to your I pod no uplink capabilities but where ever you are you will get Sirius/ Xm Maybe it was a dream I have had sirius for a few years and i love it and no way can i stand to listen to am / fm most of the time I am to far from town to get WiFi
Siri Long
Is that true? Will the new Sirius Satellite be able to stream wifi right to ipods? If this be true…why wouldn’t Apple buy Sirius. They’d have the best of both worlds. The best music buying site in itunes…and the best radio/music discovery product around. That leaked photo of the Sirius iphone app featured a “BUY NOW” button…which would enable people driving down the road to be able to buy a song they liked in a second. It’d help boost song sales. People love their ipods….they like the control. But people also LOVE to discover new music. And radio is the best way to do that. I think it’d be a marriage made in music heaven.
Rumor had it that Steve Jobs was going to make an appearance at a “special” upcoming event. Since neither Sirius or Steve showed at the WWDC….how cool would it be that this special event could link the two.
OK…I’m fantasizing alittle….but that would be cool.
Diversification will win out…
Question: For the same reason they short; why don’t they take the other side….and pump the stock up? They can make millions going in the other direction as well.
Hey Brandon….just from a casual observer(and stockholder)…check out AOL today…they are listing “10 things that are disaprearing”, terrastrial(sp) is one of them..being replaced by SIRI.
Ok I just have to ask all those that think it is just so easy to also have a ad based service. Here it is, what do they do with all the contracts that they have with the OEMs that have a rate that is charged???? I will support this question with the last time the rates went up for XMSR from 9.99 to 12.95. Now while that rate went up the rate they paid GM stayed the same at about 5 dollars, that tells me that rate is steady no matter what SIRIXM charges and not just a percentage. So here is the problem if they turn on all those GM, Ford,ect.,ect., radios for just a ad driven service they better make dam sure that the cost is more then the 5 dollars (or whatever the new contract price is)or 3 dollars they pay GM or Ford, not to mention all the other cost. People like to think things like this are just so easy, the reality is they are not. People should think about what they are saying before they start to say them.