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Posted
Feb 11 2009, 05:57 AM
by
Kim Peterson
Rating:
Money Blog: Top Stocks Blog - MSN Money
After sticking with Sirius XM (SIRI) through ups and downs, and downs, and more downs, shareholders are finally ditching the company in droves.
The stock fell by more than half Wednesday to just 6 cents a share, and there's a good reason why: The company has two options at this point, and both leave shareholders with nothing.
Customers, at least, shouldn't see interruptions in service. But prices could go up. And big names like Howard Stern could disappear as the company overhauls its contracts.
Sirius XM's biggest problem is $3.25 billion in debt that the company can't manage, particularly in this tight credit market. About $175 million is due this month -- part of $1 billion total due in 2009 -- and Sirius probably won't be able to pay.
The second problem is named Charlie Ergen.
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Posted
Dec 12 2008, 01:06 PM
by
Kim Peterson
Rating:
Money Blog: Top Stocks Blog - MSN Money
Sirius XM already has a few nails pounded into its coffin. Could Howard Stern's departure be what finally dooms the company? Stern is making some noise about leaving when his contract ends in 2010. "This is my swan song," he said on his show. Granted, this could be a lot of bluster. You never know with Howard Stern. But if he's serious about leaving, then Sirius XM stands to lose a good chunk of its subscribers.
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Posted
Mar 24 2008, 02:04 PM
by
Kim Peterson
Rating:
Money Blog: Top Stocks Blog - MSN Money
So combining the only two satellite radio providers in the U.S. won't create a monopoly. Huh? That's what the Justice Department said today after giving its blessing to the merger of XM Satellite Radio and Sirius Satellite Radio.
Both stocks soared today on the news. XM shares closed up 15% to $13.79, and Sirius shares closed up nearly 9% to $3.15.
The first thing I thought after seeing the news was that the price of satellite radio will go up. But the DOJ sees it differently. The merged company won't be able to raise prices, accordng to the DOJ, because doing so would send customers into the arms of traditional radio, HD radio, iPods and the audio content available on cell phones.
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Posted
Dec 04 2007, 08:39 PM
by
allant
Rating:
Money Blog: Top Stocks Blog - MSN Money
This post was written by Douglas McIntyre of the blog 24/7 Wall Street:
Goldman Sachs hit Sirius and XM Satellite with serious downgrades today. It knocked down shares of both companies by 5%.
What analysts don't want to say is that the future of satellite radio in the U.S. could already be coming to an end. A merger between the two companies may be the only alternative they have to stay in business. Each company has well over a billion dollars in debt. Sirius had negative operating income last quarter of $106 million on $242 million in revenue. XM was in the red to the tune of $108 million on sales of $278 million. And XM shows only $275 million in cash on its balance sheet.
Sirius had 7.7 million subscribers at the end of last quarter and XM had 8.6 million, but those numbers no longer double year-over-year. That may be because other forms of entertainment have taken over in the car. When satellite radio was launched a decade ago the rear-seat entertainment device was not all the rage. The Apple iPod did not exist.
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Posted
Jan 15 2009, 02:50 AM
by
Kim Peterson
Rating:
Money Blog: Top Stocks Blog - MSN Money
Poor Sirius XM (SIRI). The company was hammered last year by a ridiculously long wait for approval to merge, and now it has to figure out how to tackle a mountain of debt.
Nearly $1 billion in debt will mature in 2009, a truly frightening amount considering the state of the credit markets. The first chunk of that -- about $193 million -- is due next month, with additional debt due in May and December. The company is confident it can refinance, and has hired advisors to help figure out how, but I wonder how the new terms will affect cash flow and shareholder equity.
The debt is worrisome enough that Moody's downgraded the company's ratings last month, which won't help refinancing. But Sirius XM has two weapons in its favor:
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Posted
Dec 10 2008, 02:07 AM
by
Douglas McIntyre
Rating:
Money Blog: Top Stocks Blog - MSN Money
It is that time of year where companies should have been evaluating their plans for the year ahead. Each year 24/7 Wall Street comes out with a list of companies who should get rid of their CEOs or which should make some strategic changes inside the company that revolve around the CEO. Boston Scientific Corp., Citigroup, Dillard's, Eastman Kodak, General Motors, Nortel Networks , Rite Aid, SanDisk, SIRIUS XM Radio and Sun Microsystems are all on this year's list.
With so many stocks down 50% and more, the list could have had hundreds of management teams if stock prices were the sole criteria. Our measure for change is far more than just poor stock performance. But, these are the really big companies that the CEOs have wrecked.
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Posted
Dec 16 2007, 02:30 PM
by
Douglas McIntyre
Rating:
Money Blog: Top Stocks Blog - MSN Money
It is hard to find stocks that could double in a fairly short period of time. It rarely happens with shares in really big companies. There are exceptions like Apple and Amazon. But, most stocks that make big moves are smaller, and, they are often shares that have had a big fall.
For a stock to double over a few quarters it needs a catalyst of amazing earnings, a big customer win, a break-up or a buy-out. At 24/7 Wall St. we went through hundreds of companies to find ones with shares that could double. Each firm had to be matched with one or more compelling reasons to create a significant spike.
We came up with the list, and if you want to get greater detail on the analysis you can see it here.
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Posted
Nov 11 2008, 09:35 AM
by
Kim Peterson
Rating:
Money Blog: Top Stocks Blog - MSN Money
Investors are getting a clear look at the prospects for Sirius XM Radio, and it's not pretty. Third-quarter revenue and profit were disappointing, and things are going to get worse.
For the fourth quarter, Sirius expects to gain only 200,000 subscribers -- a far cry from the monster growth the industry enjoyed in the past. And new-car buyers aren't as thrilled with Sirius as they used to be: The percentage of buyers who keep the service after the free trial ends has fallen to 47% from 50.7%.
Sirius gets a lot of customers from new-car buyers, and so its fortunes rise and fall with the auto industry -- which is almost
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Posted
Aug 04 2008, 10:46 AM
by
Douglas McIntyre
Rating:
Money Blog: Top Stocks Blog - MSN Money
At the end of 2005, shares in Sirius were $7.87. At the end of 2006, they had fallen to $3.90. They now trade at $1.29. Seeing the stock price being cut in half every year or so does not prove anything other than that investors have questioned the company's prospects more over time. That questioning could become more severe, and there is some reason to believe that Sirius could trade under $1 by the end of the year.
Sirius is up against several events which could push even more of the current investors out of the shares.
1. Sirius could find that in its merger with XM Satellite the amount of money that can be cut out in a merger is below forecasts. The integration of the two companies might also take longer than forecast.
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Posted
Feb 17 2009, 09:52 AM
by
Kim Peterson
Rating:
Money Blog: Top Stocks Blog - MSN Money
I'm not sure Sirius XM's (SIRI) new "savior" is going to keep the company out of bankruptcy. Yes, the satellite radio shop has temporary relief in the form of new loans to pay off its old loans, but the terms are steep and the future is still unclear.
Liberty Media will lend $530 million to Sirius, starting with an initial $280 million loan at a high 15% interest rate. In return, Sirius will give Liberty a 40% stake in the company. Seeking Alpha says shares will need to be diluted to give Liberty that much of a stake.
For now, the deal helps Sirius XM fend off two looming threats: bankruptcy, and a takeover threat from Charlie Ergen, the boss at rival Dish Network (DISH). And Liberty Media wins for getting such favorable loan terms and new partnership opportunities with Sirius.
But most of all, it gives Sirius boss Mel Karmazin some desperately needed time.
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