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Posted
Aug 04 2008, 10:46 AM
by
Douglas McIntyre
Rating:
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
Jul 29 2008, 10:43 AM
by
Kim Peterson
Rating:
Two satellite radio companies are now one. Sirius and XM have finished their merger, and the new company is called Sirius XM Inc. Starting today, the company began trading under the former Sirius ticker ("SIRI") and shares are down 16% to $1.58.
Sirius XM threw out some numbers today to assure investors. It expects to save $400 million next year, and its earnings could be $300 million before taking out money to pay interest, taxes, depreciation and amortization. It's planning on positive cash flow by 2009.
A Goldman Sachs analyst reminded investors of a worrisome issue, though: $1.1 billion in debt is coming due next year.
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Posted
Jul 24 2008, 10:22 AM
by
Kim Peterson
Rating:
Shares of satellite radio companies XM and Sirius have come back down after the exuberant reaction yesterday to the news that the final FCC commissioner was nearing approval of the companies' merger. Sirius shares have fallen 6% to $2.51, and XM shares are down nearly 1% to $9.96. That commissioner, Deborah Taylor Tate, is expected to vote on the deal as early as today, according to the Wall Street Journal. We're also learning more about the fines that will be levied on the two companies for various FCC violations. XM will have to pay $17.5 million and Sirius will owe $2.2 million. Something stinks about those fines. They were clearly doled out in return for FCC approval. Doesn't that pretty much sound like blackmail on the FCC's part?
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Posted
Jul 23 2008, 10:51 AM
by
Kim Peterson
Rating:
Just one of the five commissioners at the FCC will decide the fate of the merger of satellite radio companies Sirius and XM, and that could happen as early as today. Reports are trickling in that Commissioner Deborah Taylor Tate is close to breaking the 2-2 deadlock on the panel and voting to support the marriage.
The Wall Street Journal reported that a tentative deal to approve the merger has been reached in a vote that went down party lines. Two Democratic commissioners opposed it, with one calling it "a monopoly with window dressing." Two Republican commissioners voted in favor and the final decision was left to Tate, a Republican.
And so ends an excruciatingly long regulatory review period that left shareholders of both companies frustrated and nervous. Come on, did the FCC really need 13 months to figure this out? Shares of both companies have shot up today, with Sirius stock up 12% to $2.67 and XM stock up 10% to $10.04.
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Posted
Jun 19 2008, 12:25 PM
by
Kim Peterson
Rating:
A Goldman Sachs analyst dropped a bomb on Sirius and XM Satellite Radio today with a pessimistic report that caused both stocks to plunge. At the heart of analyst Mark Wienkes' report is this: Young people have no need for satellite radio. By 1 p.m. PT, Sirius shares had fallen 14% to $2.08 and XM shares were down nearly 18% to $8.55.
Kids today are less interested in satellite radio, Wienkes writes, what with iPods, iPhones and other music players out there competing for attention. On top of that, the cash flows of both companies are in decline. Wienkes expects larger losses from both in the future and now rates XM a "sell" and Sirius a "conviction sell." In other words, call your broker immediately.
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Posted
Jun 16 2008, 11:11 AM
by
Kim Peterson
Shares of XM and Sirius got a boost today after FCC Chairman Kevin Martin gave his approval to the $4.2 billion merger of the satellite radio companies. Both companies' shares were up nearly 5% at 11:30 a.m. PST, with XM shares at $11.38 and Sirius shares at $2.66. Martin approved after the companies said they would devote 24 channels to noncommercial and minority programming. They also agreed to freeze prices for three years, offer a-la-carte pricing and provide interoperable radios.
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Posted
Apr 14 2008, 06:07 AM
by
Douglas McIntyre
Filed under: Microsoft, Cisco, Yahoo, E*Trade, Intel, Sirius, XM Satellite Radio, JetBlue, Dell, Take-Two Interactive, Electronic Arts
Rating:
Most companies on Nasdaq did fairly well with the shorts in the two-week period which ended on March 31. The two tremendous exceptions were Level 3, where short interest moved up 20.3 million shares to 243.9 million, and Sirius, where shares sold short jumped 40.4 million to 137.8 million.
In a tough stock market and credit environment, it is not hard to see why investors would place bets against both companies. Each stock trades near its 52-week low. Level 3 recently pushed out its president. Although it is in an attractive business, bandwidth infrastructure, it is a patch-work of M&A work with a large amount of debt and almost no cash-flow. In other words, a liquidation candidate in a deep recession.
Sirius is also hurt by a high debt-load -- over $1.2 billion -- and negative operating income. If the company's merger with XM Satellite does not go through, it may not be able to survive as a standalone company either.
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Posted
Apr 03 2008, 11:45 AM
by
Douglas McIntyre
Filed under: Apple, Comcast, Ford, DirecTV, Verizon, Sirius, XM Satellite Radio, AT&T, Time Warner Cable, Toyota, GM, Clear Channel, Dish Network
Rating:
When the Justice Department cleared the merger of Sirius with XM Satellite there was anticipation that once the deal got done the shares of both companies would go up. A year ago, the combination was viewed as a dream deal.
If anything, the shares have dropped. Sirius is below $3 and XM is below $13. The market began to realize that the year wasted on getting government approval was a year the companies need to stay competitive. XM has over $1 billion in debt. Refinancing it in the current market would be nearly impossible. Selling shares would lead to extremely large dilution. As we recently noted, Goldman Sachs even put Sirius on its "Conviction Sell List" with a price target of $2.25.
Growth at Sirius has slowed considerably. In the fourth quarter revenue rose only 29% to $250 million. But, for the full year, revenue was up 45%. Subscriber deactivations in the fourth quarter were almost 540,000 compared to 330,000 in the same quarter of 2006. The firm's net loss was $166 million. Long-term debt was almost $1.3 billion.
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Posted
Mar 24 2008, 02:04 PM
by
Kim Peterson
Rating:
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 16 2007, 02:30 PM
by
Douglas McIntyre
Rating:
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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