Continue reading Closing Bell: Briefly Celebrating DJIA 10,000 (MSG, STT, SIRI, FDO, BA, BGP, EMC)

Closing Bell: Briefly Celebrating DJIA 10,000 (MSG, STT, SIRI, FDO, BA, BGP, EMC) originally appeared on BloggingStocks on Wed, 07 Jul 2010 16:00:00 EST. Please see our terms for use of feeds.

The stock market is tough enough to navigate without having to deal with roadblocks that have nothing to do with corporate execution of a business plan or normal supply-and-demand dynamics for equity securities.

We make an investment on reasonable assumptions and take the risk that such assumptions pan out. What we can't do is foresee events that are totally outside of the control of the company, economy, or ourselves. For example, if we buy a stock of a company that utilizes acquisitions as part of its strategy, we can safely assume from past examples that the government will approve or disapprove such acquisitions in a reasonable amount of time.

Continue reading Blame Uncle Sam for the demise of Sirius

Blame Uncle Sam for the demise of Sirius originally appeared on BloggingStocks on Thu, 12 Feb 2009 18:40:00 EST. Please see our terms for use of feeds.

Sirius XM (NASDAQ: SIRI) is up against debt payments that its management has been saying would not be a problem.

According to The Wall Street Journal, "Sirius XM Satellite Radio Inc. is facing an important test of its viability this month: how it handles $174.6 million in debt coming due Feb. 17." Since the company has not reported its fourth quarter, no one knows for certain how much cash Sirius has. More debt payments are due later in the year.

Could the debt problem this month push Sirius into Chapter 11? It is impossible to tell, but the obligation has not been renegotiated or replaced with new debt.

Continue reading For Sirius (SIRI), chapter 11 looms

For Sirius (SIRI), chapter 11 looms originally appeared on BloggingStocks on Mon, 02 Feb 2009 09:20:00 EST. Please see our terms for use of feeds.

Sirius XM Radio

Continue reading Sirius XM shareholders OK reverse stock split -- it's not going to help

Sirius XM shareholders OK reverse stock split -- it's not going to help originally appeared on BloggingStocks on Fri, 19 Dec 2008 09:39:00 EST. Please see our terms for use of feeds.

I've known for some time the risks inherent in owning Sirius XM Radio (NASDAQ: SIRI), but never in my right mind did I think the company would fail, leaving shareholders with nothing but a worthless stock certificate.

And yet here we are today with SIRI trading for 25 cents per share and a market capitalization of less than $800 million. Investors are expecting the worst with SIRI. All that remains is pure speculation on survival or failure.

It really comes down to that simple question: Will SIRI make it?

If the answer is yes, then investors can still reap a tremendous reward. If the answer is no, investors will lose everything.

How did we get to this point? The answer is quite simple. Destructive competition between two competitors in a race for supremacy that never did materialized resulted in cost structures that kept pushing profits down the road.

When it was realized that the industry could potentially lose both entities, a merger was announced. Oh, but wait, a government supposedly looking out for the interest of customers dragged its heels.

Losses mounted while both companies waited and waited and waited.

Reluctantly, the government finally approved the deal, but is it too late?

Continue reading Can Sirius XM Radio (SIRI) survive?

Can Sirius XM Radio (SIRI) survive? originally appeared on BloggingStocks on Wed, 12 Nov 2008 12:45:00 EST. Please see our terms for use of feeds.

Okay, let me state clearly at the beginning here that Sirius XM (NASDAQ: SIRI) closed on Monday at $0.27 per share. Right from the start, you know we're talking about a risky stock -- a lottery ticket, as they say. And since our subject is the result of a recent merger, there's a lot of pro forma data located in the press release detailing the satellite-radio company's Q3 performance.

According to that pro forma data, revenues increased 16% to almost $613 million. The pro forma net loss was halved to $0.09 per share. It's funny, because when you look through the numbers, you almost feel compelled to come away with a good feeling about the story. Total subscribers increased 17% on a year-over-year basis, subscriber-acquisition costs decreased, cost synergies are manifesting themselves, and projections for free-cash-flow generation seem to be attractive.

However, one has to realize that an attractive cash-flow statement isn't around the corner. Positive free cash flow should begin on an annual basis in 2010. Plus, Sirius XM management must deal with refinancing its debt. And it did make a $4.8 billion write-down relating to goodwill impairment. Also, the economic problems of auto manufacturers such as Ford (NYSE: F) and General Motors (NYSE: GM) are not helping Sirius XM. If car sales are down, then adoption of the satellite-radio company's programming is challenged. It's a simple relationship.

Continue reading It's probably best to stay away from Sirius XM, but...

It's probably best to stay away from Sirius XM, but... originally appeared on BloggingStocks on Tue, 11 Nov 2008 09:28:00 EST. Please see our terms for use of feeds.

Sirius XM Radio unveils more programming options originally appeared on BloggingStocks on Mon, 06 Oct 2008 15:18:00 EST. Please see our terms for use of feeds.

Continue reading Closing Bell: Dow up a whopping 331; ADM falls, Lehman rises

Closing Bell: Dow up a whopping 331; ADM falls, Lehman rises originally appeared on BloggingStocks on Tue, 05 Aug 2008 16:14:00 EST. Please see our terms for use of feeds.

Continue reading Closing Bell: Bulls feel pretty roughed up

Closing Bell: Bulls feel pretty roughed up originally appeared on BloggingStocks on Mon, 28 Jul 2008 16:15:00 EST. Please see our terms for use of feeds.

Sirius acquisiton of XM to finally get FCC approval originally appeared on BloggingStocks on Wed, 23 Jul 2008 15:59:00 EST. Please see our terms for use of feeds.

Three of the commissioners of the FCC have voted on the Sirius (NASDAQ: SIRI) merger with XM Satellite (NASDAQ: XMSR). Two have voted in favor, and one has voted against. That leaves two other votes. In other words, the deal could still be killed.

One of the remaining commissioners has indicated that he would vote for the merger if the companies would agree to a six-year price cap on their services. According to The Wall Street Journal, "The offer was viewed as an attempt to start negotiations, but the companies so far are showing little interest in haggling."

Is it any wonder? The most recent earnings reports from the two companies indicate that, while their losses are getting smaller, their subscription growth rates are slowing. Each firm has more than $1 billion in debt and neither has ever had an operating profit. In other words, if the companies cannot raise their rates the chances of them becoming profitable are significantly curtailed.

The FCC may be putting Sirius and XM in an almost impossible position. If they are willing to make moves which could hurt their earnings longterm, they may get the votes they need for approval. If not, the merger could be scuttled.

The future of satellite radio is now based on two bad outcomes.

Douglas A. McIntyre is an editor at 247wallst.com

Sirius deal with XM could still be killed originally appeared on BloggingStocks on Wed, 23 Jul 2008 09:22:00 EST. Please see our terms for use of feeds.

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Continue reading Closing Bell: Great recovery continues, except for tech

Closing Bell: Great recovery continues, except for tech originally appeared on BloggingStocks on Fri, 18 Jul 2008 16:13:00 EST. Please see our terms for use of feeds.

• DJIA 12,549.00 (+69.37)
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• 10 YR T-Note 3.921%, +0.09%.
• 52-WEEK LOWS saw 3 DJIA components today.
• TOP 10 ANALYST CALLS

Continue reading Closing Bell: Buyers come out of the sewers to save the day

Closing Bell: Buyers come out of the sewers to save the day originally appeared on BloggingStocks on Tue, 27 May 2008 16:27:00 EST. Please see our terms for use of feeds.

Is Sirius Satellite Radio a buy? Yes apparently originally appeared on BloggingStocks on Wed, 07 May 2008 17:20:00 EST. Please see our terms for use of feeds.

Either short sellers don't think a merger between Sirius (NASDAQ: SIRI) and XM Satellite (NASDAQ: XMSR) will happen, or they don't believe that the deal will save the two debt-laden companies. Short interest in Sirius rose 20.2 million shares for the period ending April 15 compared with March 31. Total shares sold short hit 157.9 million. Shares short in XM also pushed up 6.3 million to 22.7 million.

The bets may be smart ones. The delay in approving the deal at the FCC has probably made it less likely that the merger will get the green light. A number of members of Congress have loudly protested that the new company would be a monopoly, They reason that a new entity would eventually raise rates sharply because there will be no competition to dampen prices.

The core problem with the merger may be more profound. Subscriber growth rates at the two companies are slowing. Both also have negative net income. At this point, neither company has predicted when it might make a profit.

The biggest burden that the companies have is their debt. Each has over $1 billion in long-term obligation to repay bonds and loans. In a poor credit environment, it is hard to see that paper getting refinanced at better rates.

A new company, even with some cost savings, could have enough debt to sink it.

Douglas A. McIntyre is an editor at 247wallst.com.

Short sellers make large bet against Sirius (SIRI) merger originally appeared on BloggingStocks on Fri, 25 Apr 2008 09:45:00 EST. Please see our terms for use of feeds.

• DJIA 12,532.60 (-16.04; -0.13%)
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Continue reading Closing Bell: Where'd that bear go?

Closing Bell: Where'd that bear go? originally appeared on BloggingStocks on Tue, 25 Mar 2008 17:48:00 EST. Please see our terms for use of feeds.

FCC now decides if satellite radio lives or dies originally appeared on BloggingStocks on Mon, 24 Mar 2008 17:15:00 EST. Please see our terms for use of feeds.

Sirius Satellite Radio (NASDAQ: SIRI) ended the year with 8.3 million subscribers, up 38%. The company would probably prefer to have had its merger with XM Satellite (NASDAQ: XMSR) approved, but the subscriber growth is a consolation prize.

Chief Executive Mel Karmazin told The Wall Street Journal, "Our gross subscriber additions in 2007 were the highest in the history of satellite radio."

That still leaves open the question of whether Sirius is a viable company without the merger. It lost $121 million last quarter and it has long-term debt of almost $1.3 billion.

Some analysts believe that the merger will bring savings. But, the talent on the two satellite networks is not likely to want to take pay cuts. The new company would also have to run two networks for some period because the systems are not comparable.

The subscriber additions are nice news, but the company is still a long way from being viable.

Douglas A. McIntyre is an editor at 247wallst.com.

Sirius gets more subscribers, but no merger originally appeared on BloggingStocks on Fri, 04 Jan 2008 11:22:00 EST. Please see our terms for use of feeds.

The sizable hurdles of regulatory approval on the part of the Justice Department and the Federal Communications Commission (FCC) remain. Those opposed to the collaboration say the deal would create a monopoly in the satellite radio industry and point to the failed merger attempt between EchoStar Communications (NASDAQ: DISH), parent of the DISH Network, and DirecTV.

Continue reading Sirius, XM shareholders approve merger

Sirius, XM shareholders approve merger originally appeared on BloggingStocks on Wed, 14 Nov 2007 11:36:00 EST. Please see our terms for use of feeds.

Sirius posts 'expected' numbers for quarter; sees 50% increase in customers originally appeared on BloggingStocks on Tue, 30 Oct 2007 12:03:00 EST. Please see our terms for use of feeds.