Does anyone hold this stock? What are your thoughts on the company now that the merger has taken place? The stock price to me  seems too beaten up.

I know nothing and have no thoughts about the company now that the merger has taken place.  I have a position because the indicators I use in the Bottom Fishing group suggest an up move.

 

I personally think itll get to profitability faster with the combined company. It wont happen for a while but things look slightly more promising. i sold some when it moved higher but i am still holding some. I think at this point im just going to just "let it ride". I have  over a year before im going to start using my money.

Chrisr84:

Does anyone hold this stock? What are your thoughts on the company now that the merger has taken place? The stock price to me  seems too beaten up.

No, that's entirely wrong. Sirius started out too overpriced. It's not beaten up, in fact it's STILL too expensive for what the company is worth. If you hold it, you should sell.

CD_Vision:

No, that's entirely wrong. Sirius started out too overpriced. It's not beaten up, in fact it's STILL too expensive for what the company is worth. If you hold it, you should sell.

 

CD_Vision,

 

Telling someone straight out to SELL without providing a more detailed and objective analysis is either 1. irresponsible and spreads fear; or 2. benefits YOU if you are currently short selling the stock. 

 

I would be interested to know IF you are short SIRI and in seeing the valuation model you built on SIRI to derive that they "started out too overpriced" and are "still to expensive for what the company is worth."

 

Don't get me wrong, I'm not questioning either statement.  I'm simply asking you to provide your valuation model that supports your statements.  Seeing some of your other comments, I'm sure you have built a very good model.

 

While we're at it, for educational sake, could you give a brief explanation on the best methods to value an unprofitable company?

Here are some interesting articles on SIRI.  To my less than knowledgeable eyes, they appear to be fairly objective, though the author clearly discloses he is long SIRI.

 

Sirius XM Cramer Wars

Sirius XM Cramer Wars 2

Goldman Sachs Bullish on Sirius

Jim Cramer May Have Crossed a line

Time to Cover Sirius XM Shorts

SIRI is a traders security. It will bounce around a bit as it heads out the door. SIRI has a falling customer base, billions in debt, expensive hardware floating out in space that will need serviced and replaced at billions more, a desperate CEO, and 2 or 3 Zecco traders trying to keep it afloat. It is a traders security because you can buy around 1.30 or so, and sell at 1.40 or so, then rebuy at about 1.25 and re-sell around 1.35, and go back and forth until and as, it fizzles into oblivion.

It is not an investors security, it will not grow over time and, in fact, has a very limited life expectancy. A real investor will discard it, has in fact already discarded it or refuses to go anywhere near it. It is not a long term security.

MichaelAT:

SIRI is a traders security. It will bounce around a bit as it heads out the door. SIRI has a falling customer base, billions in debt, expensive hardware floating out in space that will need serviced and replaced at billions more, a desperate CEO, and 2 or 3 Zecco traders trying to keep it afloat. It is a traders security because you can buy around 1.30 or so, and sell at 1.40 or so, then rebuy at about 1.25 and re-sell around 1.35, and go back and forth until and as, it fizzles into oblivion.

It is not an investors security, it will not grow over time and, in fact, has a very limited life expectancy. A real investor will discard it, has in fact already discarded it or refuses to go anywhere near it. It is not a long term security.

 

Michael:  I asked for a "valuation model" from CD_Vision, not an opinion from MichaelAT. 

 

A valuation model means cold hard numbers, data.  The statement was made that SIRI started overvalued and still remains overvalued.  That means either CD_Vision has his own valuation model, or he is basing that statement on someone else's valuation model.  I asked for a posting of that valuation model showing it is "undervalued".  I also asked how he would go about valuing an unprofitable company.  He may very well be an investor who only invests in P/E positive companies.  If so, I respect that.  But, that statement should be clear.

 

As to your opinion, I respect it as well.  Although, I still ask for data, not an opinion.  Data are facts, opinions are individual assessments.  So, looking at your opinion:

 

"SIRI has a falling customer base" -- Based on what FACT?  You made an open statement that SIRI XM combined had a subscription base of over 20 million and so their 19 million current subsciber base is proof of falling customer base.  I posted the real numbers showing sustained growth of greater than 25%, even with the current auto industry problems.  I asked you repeatedly to post cold hard numbers proving this statement, yet in every instance, you responded with personal attacks.  If you're planning on making this statement, I again ask you to show the numbers.

 

"billions in debt" -- Very true, and we can both see this debt in the balance sheet.  I would discount the large debt, it is troubling.  Once upon a time, though, Google had "billions in debt", yet they were able to overcome it.  There are many companys with "billions in debt", yet survive and achieve profitability.  It's not so much their total debt as it is their short long term debt and if they are able to pay it.  If they can, they survive.  It then becomes an issue of positive earnings and cash flow.  SIRI and XMSR both were continuing to grow earnings year over year, and SIRI XM has projections for both in 2009.

 

"expensive hardware floating out in space that will need serviced and replaced at billions more" - I'm sure you're an expert in satellite technology and have researched this thoroughly.

 

"a desperate CEO" - This is an opinion based on... ???  A stock purchase?  Appearances on television shows discussing the merger and his business plan to make this work?  I've yet to read one article by any journalist or even critic that states "Mel Karmazin is desparate."  You are the only person I have ever seen actually make this statement.

 

"2 or 3 Zecco traders trying to keep it afloat" - You are 100% correct!  In the entire market, the only people buying are 2-3 Zecco traders.  I am impressed with your astute observation.

 

"It is a traders security because you can buy around 1.30 or so, and sell at 1.40 or so, then rebuy at about 1.25 and re-sell around 1.35, and go back and forth until and as, it fizzles into oblivion" - No doubt it is trading between $1.30 and $1.50.  I have myself made the buy at $1.30 and sold at $1.50.  Guess what this equals?  Go ahead, guess... profit!  I will also give you that it is one UGLY chart.  The downtrend is horrid.  However, I can point to 100 charts that show a significant downtrend that did come to an end and move the other direction.  In fact, I have fielded numerous questions regarding SIRI.  The #1 question... "Should I buy?"  My answer?  "NO.  Not until it clearly finishes its downtrend and changes direction.  Not until all this hate for the stock ends and the winds change."  --

 

"Fizzles into oblivion" -- again, another opinion based on what???

"It is not an investors security, it will not grow over time and, in fact, has a very limited life expectancy." - this again is an opinion not based on any factual evidence.  Say it will never grow over time is quite a statement of finality and something I've seen Mr. Market work very hard to disprove.  You may be right, I'll grant you that.  But you may also be right saying that the world will one day come to an end.  We're still all waiting for evidence, facts...

 

"A real investor will discard it, has in fact already discarded it or refuses to go anywhere near it. It is not a long term security."   'Real investor', implying you, yourself, and you?  What value does this statement add to a professional discussion or debate?

 

Michael, you have made it very clear you HATE Sirius... for whatever reason.  Maybe you're short selling it, you don't disclose your position, so none of us know.  Maybe you took a beating and gave up on it and so now you're cheerleading for its demise.  Fair enough.  I respect that you have an opinion, but you never back up your opinion with any type of factual evidence.  Instead of continuing to spread your hate for the stock and company, might I suggest you join the professional debate of the company and stock by providing some data and evidence to back it up?

 

By the way: 

SIRI finished 2005 with 3.3 million subscribers, 2006 with 6.0 million, and 2007 with 8.3 million.  They currently have 8.9 million...

XMSR finished 2005 with 5.9 million subscribers, 2006 with 7.6 million, and 2007 with 9.0 million. 

 

Adding this up:

2005:  3.3+5.9 = 9.2 million

2006:  6.0+7.6 = 13.6 million

2007:  8.3+9.0 = 17.3 million

Currently they have what 19.6 million, half way through 2007?

This sure does look like subsciber GROWTH, not a "falling customer base".

 

Now, back to my original questions:

 

1.  Can we see the valuation model showing it's currently undervalued?

 

2.  For educational sake, how does one go about valuing an unprofitable company?

Hello

After you have seen stocks like Enron doctor up their reports and CEO ‘s say that the dividend is not going to be cut just before it was cut , plus many others why trust any of the numbers or anything from the company. That is why they call it speculation time will tell. Telling someone to sell this risky stock is much better guidance than just throwing out a bunch of numbers. If this industry is going to become a viable one there will be less risky entry points in the future. :-)

“Become aware of what is not obvious” quote by some Samurai who’s name I don’t know.. Oh the Zen of it all..

blaster:

Hello

After you have seen stocks like Enron doctor up their reports and CEO ‘s say that the dividend is not going to be cut just before it was cut , plus many others why trust any of the numbers or anything from the company. That is why they call it speculation time will tell. Telling someone to sell this risky stock is much better guidance than just throwing out a bunch of numbers. If this industry is going to become a viable one there will be less risky entry points in the future. :-)

“Become aware of what is not obvious” quote by some Samurai who’s name I don’t know.. Oh the Zen of it all..

 

blaster:  I agree.  Unfortunately, companies can doctor reports.  Why is this limited to any specific company?  Any company can doctor reports or make misleading statements.  If that is the case, then what is the use of any type of fundamental analysis?  Junk in, junk out!  

 

May just be me, but I'm more in favour of tossing facts, including accurate data, out on the table and allowing the individual to make his/her own informed decision with his/her own money.  It's their money, afterall.  Anyone who chooses to "advise" should then endevour to help that person make an informed decision, by providing relevant information, good and bad.

 

Which do you think creates a better, more valuable discussion to someone asking a question and opinion about the state of a stock?

 

1. I performed a valuation of Sirius XM based on X, Y, Z data, assuming A, B, C and came up with an approximate valuation of $1.05.  I would also point to potential piling liquidity issues especially the short long term debt of $X million due is Feb as a point of concern.  Based on this valuation and these other factors, I would recommend selling now, assuming the stock will continue its downtrend to hit this valuation.  If you really like the company, you could always buy it back at that valuation, after immediate liquidity issues are resolved, and at least until SIRI breaks its current downtrend.

 

or

 

2.  It's undervalued and I think it's tanking.  Although the subscription numbers show growth, I bet they really had more than 20 million subscribers six months ago and so they really have a shrinking subscription growth... just depends on presentation.  Also, I think the CEO is desparate and just trying to save his arse by spending $2 million of his own money on SIRI stock.  You need to sell now to avoid any possible pain.  I mean, there's really only 2 or 3 people buy SIRI stock, so why would you want to buy it?

 

By the way, from recollection, weren't Enron insiders, CEO, CFO, COO, COP selling whilst lying to the investors and employees?

blaster:

Hello

After you have seen stocks like Enron doctor up their reports and CEO ‘s say that the dividend is not going to be cut just before it was cut , plus many others why trust any of the numbers or anything from the company. That is why they call it speculation time will tell. Telling someone to sell this risky stock is much better guidance than just throwing out a bunch of numbers. If this industry is going to become a viable one there will be less risky entry points in the future. :-)

“Become aware of what is not obvious” quote by some Samurai who’s name I don’t know.. Oh the Zen of it all..

 

"Those who lack courage will always find a philosophy to justify it."