By Brandon Matthews
There is really no other way to describe it. It’s been a tough week for shares of Sirius XM Radio (SIRI) and the only reason that I can find for the recent drop in share prices is an apparently coordinated attack by various media sources. The level of disinformation, misleading headlines, outright lies and the dissemination of old news as new has reached a level that is simply overwhelming. Some of these false reports appear criminal in nature, and yet the volume is such that the company is rendered helpless as any fight the company might wage would cost far too much and take far too much time to make any real difference.
Are Sirius XM Radio insiders selling shares?
Making headlines this week are allegations by self proclaimed insider trading experts that Sirius XM Radio executives are selling shares. These are false allegations. Following the merger of Sirius and XM, and as executive compensation came under fire in light of AIG bonuses earlier in the year, Sirius XM Radio issued bonuses to its top people after successfully navigating the merger fiasco created by the FCC, in the form of company shares. In most cases, people receiving holiday bonuses or incentive compensation such as a commission check are able to deposit that money into their bank accounts. Sirius XM went a different route in which the company’s executives adopted a 10b5-1 plan. Apparently, these self proclaimed insider trading experts that are publishing false information missed this particular class at insider trading school.
Under such a plan, sales are planned over a set period of time. The plan itself is a means of AVOIDING insider trading accusations. Once set in motion, shares are sold incrementally and the sales are required. The executives do not get to decide on when they will sell, or at what price. It does not matter what they do or do not know. We have known about this since May when the plan was filed with the Securities and Exchange Commission and have been following closely on the Satwaves forum. For those that question the source of those shares, it has been quickly forgotten that Sirius XM Radio’s CEO Mel Karmazin voluntarily gave up his own options so that bonuses could be paid to his top people. Looking deeper into the holdings of these executives, it is clear that the “accused” will continue to hold substantial positions outside of these bonus shares and that no shares of these core positions have been sold by any executive at Sirius XM Radio.
Royalty Fee…Deceptive?
Not content to attack the company from an investment perspective, even the Associated Press published a misleading article last week that other self proclaimed news organizations have been all too happy to republish. In what can only be described as THE WORSE PIECE OF JOURNALISM in the history of the AP, a reporter called a royalty fee “sneaky” and then retracted the word several hours later without so much as a retraction notice or apology. A little too late as other news organizations picked up the story through a feed and ran with it.
Anyone who has an issue with musicians and artists being paid for their work is sneaky. Clearly this type of person is likely to steal music off of the Internet through illegal downloads rather than pay 1.00 to legally own the material. If that were not the case, these same basher type journalists would not have an issue with a mere 1.99 royalty fee. Terrestrial Radio passes on these costs also, in the form of extra commercials. That is sneaky. Sirius XM has been up front about this fee before it became reality back in July of this year. Why are we hearing about it again now? Good question! Satellite Radio opponents are hopeful that cancellations will occur over such a “sneaky” issue.
Bankruptcy…Say it’s not so!
It’s not so! There is absolutely no chance that Sirius XM will file for bankruptcy in the next 12 months no matter how many polls are supposedly conducted by outfits like TheStreet.com, which not only published its poll results, but retitled the headline and republished the same article twice on the same day. Simply put,Sirius XM has absolutely no debt issues prior to the year 2013 that could cause such an event to occur.
In an ironic twist, Satwaves is currently conducting a poll asking which companies are likely to go bankrupt in the next 12 months. As of this morning, our survey indicates that an overwhelming 97% of respondents feel that Jim Cramer’s TheStreet.com is the most likely company to file for bankruptcy protection in the next 12 months. With all the garbage articles spewed by the faltering company, it’s not surprising that news such as TheStreet.com’s recent delisting notice and failure to timely file results with the SEC get buried under news searches for the company. Buyer beware! TSCM is probably the best short play on Wall Street right now. Sirius stands at only 2%, just 1% more than WalMart. (WMT)
Position: Long SIRI
Good article
These bozos dont do their homework and put out false statements and half truths to mold their devious objectives of taking down Sirius XM share price.
It just wont work anymore once the numbers continue coming out beating their ever so low expectations.
Absolutely right on, Brandon. All of the points you make, above – backed up by factual information – totally discredit the false accusations repeatedly seen by the media flaks over the last few weeks (reaching a crescendo over the last few days). I, too, noticed the word “sneaky” in the original release about the $2 royalty fee pass along when it was originally posted – and then mysteriously disappeared within an hour or so. Notwithstanding this barrage of negatively planted “news” by the consortium of manipulators – right under the ever watchful eye of the SEC – SIRI remains buoyant and attacting support on pullbacks resulting from this ongoing attack. If the 3rd and 4th Qtr. releases validate the favorable expectations legitimate investors now have for the company in response to the positive product developments coming on stream into the future, SIRI will no doubt resume its upside trajectory – in line with technical projections of potential toward 1.00 by yearend – and well beyond into the future.
Nice job Brandon in clearing up in a concise point by point manner the half truths and lies being spewed by these so called experts.
Brandon, clearly one of your best and the timing could not be better!
Good article Brandon. Let’s hope the truth goes a long way.
Thanks Brandon for keping the retail investors suppied with the truth. Reading the daily lies and slander pumped out by the anti Sirius thugs is like owning a store and everyday the same gang of punks come in and try and rob the store blind with no police to stop them (SEC). Your efforts to at least keep them from killing everyone (BK) along with their thievery is muchly appreciated.
Thanks Brandon, excellent article. Now lets just hope the skittish SIRI investors will read it, digest it, study further on their own and realize they need to get back in.
It amazes me that tactics this basic and obvious are proving effective. It should have the opposite effect of causing many to see that an attempt is on to steal their shares.
Good article Brandon – Thank you!
Brandon,
awesome article. i also follow and am long CVM – cell scientific am sure you are familliar as the writer on seeking alpha covers it as well. The street.com also bashes this stock in the same way as it does siris its uncanny how similar their approach is. Where can i go to vote on most likely companies to go bankrupt? Is the poll on your website? Alos missed the show last night are they always on wed nites? I hate to miss them but it seems like you wait to last minute please inform me via facebook or email kentcansell@nyc.rr.com. going to bestbuy on upper esast side in manhattan to check out skydock now.
Brandon,
Very good article. Thanks for the good work.
Let me ask this one from a citizen of Europe.
What is this SEC ? Is it dead ? Is it blind? This manipulation is so obvious that even a child can see them. And it’s been there for a long time now. Why can the SEC not see it? Why do they nothing against it. The system will fail again. What or which organisation controls the SEC? There is a saying here in Belgium: Only a donkey kicked 2 times against the same stone. Wel I think America is on his way to kick a second time the same stone. Be ware!
Thanks, Eric
Brandon – in the past I have “chastized” you for fueling the fire, but you are dead nuts on with this. The negative press is unrelenting. What’s the motive (other than busting your / our balls – you know for damn sure they like to, they even mention it in articles)? I still think these guys are getting greased by the organization that SIRI hurts most – the NAB.
Will this article get picked up by Google, Yahoo, and others?
How/who can we protest this mis-information campaign to? I have seen ONE Satwaves article picked up by the Google finance app, along with hundreds of the false stories. These dodos are smooth. How can we be just as smooth? Give us someone to email a protest to and maybe we can flood them with emails to give SIRI an even break. I am not selling and I do not click on their phoney stories.
Notice to all: On the Yahoo Finance page, there was a posting at 11:44 from TheStreet.com – re: Ten Stocks Facing De listing. When I clicked on the story, the first name that came up was Sirius XM. I just went back to check this again and the entire story had been removed from the Yahoo Finance site.
Right on brother- fight the good fight. This manipulation has me sick but the sounds from my satelliite radio calm me down. The SEC needs to get it’s game face on and get in the game. It’s not like all this manipulation is under the surface it’s blatant and libelous.
Good word, Brandon. Thanks for keeping the heat on!
Here’s an article from yesterday’s NY Post about Clearchannel.
http://www.nypost.com/p/news/business/bankers_revenge_jHvcVTe55P0m9sApPCGZlI
They’re Baaaack! TheStreet.com just posted another “The Dangers of Delisting” on Yahoo Finance – mentioning, once again, Sirius XM as a top ten candidate for delisting. Hope the SEC eventually wakes up to the collusion among manipulators that is obviously going on.
Now this is the article I was talking about yesterday! Still don’t see it pop up in a Google search though. Hopefully SA will pick it up in the morning.
One note though, I still see the “sneaky” word in the AP article: http://www.google.com/hostednews/ap/article/ALeqM5gUuJYVv5HhP1WK01tc1ZpO9OUdGQD9B1RFQ01
This week, certainly it seemed that the press was whipping up non-stories (though brazen headlines), nonetheless I still don’t get WHO would collude, manipulate and WHY.
Anyone want to give me a mini-tutorial? NAB? Aren’t the majority of investors retail anyway, can they be duped so easily? Thanks.
I am Long.
@Ken B
Ken B “Who would want to collude, manipulate, and WHY?” The manipulation occurs by those who are massively short SIRI, through tactics of Naked Short sales, high speed Flash Trading, aided and abetted by collusion with certain well known media sites that wish to gain favor with these large trading institutions by pressuring the stock through repeated false and misleading articles and headlines. With this information at hand, I think you can identify the players in this scheme.
If you want a thorough exposure as to how this all works, I would suggest you get a copy of the current edition of Rolling Stone, and read the article “Wall Street’s Naked Swindle” by Matt Taibbi.
We’re talking about a monopoly with a satellite media company, enough said.
I believe this game goes back to pre-merger. However, I think there is some info that I would like to view from Mels first interview on mad money after the merger. Does anyone have a copy of the august 8, 2008 Mad Money interview between mel and Jim?
Thanks RAF, appreciate your thoughts. Will def check out Rolling Stone article. Last question: do you ever see a day when SIRI’s fundamentals are so strong that massive short selling will be impossible?
Just had dinner in a fine Italian restaurant – great food and excellent music – Siriusly Sinatra via Sirius XM. This is the wave of the future, as a replacement for Muzak. Another profitable new line of business for Sirius XM.
http://video.google.com/videosearch?hl=en&source=hp&q=sirius+xm&um=1&ie=UTF-8&sa=N&tab=wv#
Skier:
Listen to the Cramer video on 8/11/08 and the interview with Wible and 6.50 price target. Now I remember why I loaded up.
Thanks SXMINVESTOR for the Cramer vid link. Last, last question for any takers…why would Cramer be so on board with SIRI just over a year ago, but now has changed his tune? The NAB cannot have gotten to him as he made a point to criticize them et. al.
Ken B,
No but GS did
Nice positive news.
Bravo!
Very Nice Article. The lies and misinformation have been
overwhelming this week!! We are in a great place going
forward into the CC. SkyDoc is Huge…..came out early
at BB……amazing. The Best is Yet to Come.
Hold on Gang……..Truth shall prevail!!
Thanks, Brandon
@Ken B
Ken B – I think the truth will ultimately prevail, and the truth is that Sirius XM is a superior combination of content and delivery in the radio arena. If management can properly harness and market this outstanding potential, the markets will surely realize this and shorts will be covered (or risk ever growing losses). It is now up to management to really demonstrate performance – and the earliest indications of this will be with the upcoming 3rd and 4th Qtr. releases due in November and February.
Great article Brandon! It seems like everyday they release another attack article! I think The Street.com needs to get it’s own house in order first before attacking another house!!!
Thank You Brandon. Great job. Always appreciate your effort for investigating and bringing the truth to the people.
And say: “The Truth has arrived, and Falsehood perished; for Falsehood is bound to perish.”
Thanks again RAF. Your sober and clear input to this board has been really invaluable.
@Ken B
I appreciate your comments – we are all in this together.
Ken,
It is my belief Cramer was setting the retail investor up so that his “buddies” could drive the stock down after the merger. I am seeking the august 8th, 2008 mad money interview with mel that I belief will confirm my thoughts. The key here is that hindsight is 20/20. There are things that will be very clear if we look at the statements a year later. I do not want to be accused of being a conspiracy theorist, but there are some organized efforts that brought this stock down.
I think your onto something here Skier! After looking at some of his older videos today I think he was just trying to get his “shorty buddies including Goldman Sachs” a higher perch to short it down! Watching the older videos he was all pumped up about Sirius! Now him and his cronies or puppets are trying everything they can to run this stock down while covering low and picking up shares on the cheap with their Stop/Loss game! He pretends to be for the little guy but after being a shareholder in this company I think he is just for himself!
Has Cramer ever actually explained his 180 turn on SIRI…. I have e-mailed him and asked but have never gotten a response
Cramers defense will be the “ugly” financing Mel did to complete the merger. If I remember correctly, Cramer began to change his position right before the merger was anounced. I think he was aware of the XM debt refinancing that was going to be required to close the deal. He waited patiently, then his “team” attacked.
Another question. why is SIRI investor relations not replying to these horrible articles. why is the investment relations department there? Also, is anyone aware that Paul Blalock is no longer there? Wasn’t he executive level? doesn’t that departure warrant a announcement?
RAF you seem to be a very well versed stock analyzer. Do you think it is possible for the shorts to keep this stock down long enough to force a RS? I bought this stock for 3 reasons, 1 to make money, 2 i love the technology and 3 I believe Mel is a media genius. 75,000 shares long but starting to waiver
@bob
bob – I am long SIRI for the same reasons you note in your comments. Although the stock is being manipulated, and the shorts have demonstrated an ability to keep pressure from permitting real upside momentum at this time, I believe the fundamentals are sufficiently positive to eventually overwhelm this pressure. In terms of timing – it all depends upon the ability of management to start demonstrating real performance, so the markets are on hold pending the upcoming releases. Assuming the positive developments we already recognize – auto resurgence, new wireless devices and Apps, etc. – translate into enhanced revenues – demonstrated by early 2010 – then SIRI will probably trade above 1.00 before any reverse split would be required. My own opinion – based upon known observations of Priceline and Finisar when they went through reverse splits – is that there is nothing to fear here. Most of the recent negative commentary about reverse splits being disasterous is pure “fear mongering” by the manipulative shorts. Both Priceline and Finisar actually rallied through – and after their reverse splits, and I believe this would also be the case for SIRI if a reverse split was enacted sometime in the future. For all these reasons, I am holding my position in SIRI and plan to add to it along the way. Right now I believe we are in a lateral holding pattern, banded by .40 to .70, midpoint focus at .55 and this should guide strategy over the near term – heading into the 3rd Qtr. release in November. Dips below .55 should attract progressively stronger support, and rallies above .55 should meet progressively stronger resistance, as seen over the last few days.
Over the longer term, I believe SIRI will trade higher – toward .90 to 1.00 by yearend; toward 1.25 to 1.50 over the next six months to one year: and toward 4.00 over the next two years – based upon longer term chart formations and potential projected from the rounded bottom that has recently completed (October ‘08 through August ‘09).
thank you RAF your time is much appreciated
we are a country of 300 billion people,thats a lot of radios.what is the nabs problem with 19millon sirius subs? What? the freedom to choose commercial free listening?An objection to people upgrading the quality of their lives?People having enjoyment?Free telivision still thrives.Looking foward to 40 millon subscribers. Long sirixm.
Brandon, Or anyone else with knowledge…I am relatively new to investing. I;ve been investing in SIRI….actually XMSR, before the merger for the last 3 years or so. Why are there 3.9 billion shares of SIRI outstanding? Why would a company dillute their shares so much? It seems to me that a rev-split would be a good thing, or some other remedy to reduce the number of shares outstanding. Can, some one help me understand ? How is it a good thing to have 3.9 billion shares outstanding for 1 company? Then have those dilluted shares trading as penny stocks? I look at AAPL outstanding shares and they have 895.8 million, google 316 million, . SIRI has about 4-5x as many shares as APPLE? (quick math) why is this? What successful company has more shares outstanding? That would be a great article….If you havent done one already….thanks in advance for anyones help
xm skydock app is available now!…..has anybody used it??
App is not available till 10/12
It’s on iTunes RIGHT NOW
@Brandon Matthews
yup it is….sweet!!
shorts dropped another 16% as of Sept 30th, so why the hell is the stock dropping so much ?