By – Rick King
Few times in the history of this behemoth Satellite Media Company have investors looked so forward to a conference call. Sirius XM Radio (SIRI) has been throwing punches left and right over the past year to fight it’s way out of near bankruptcy and back into profitibility. Recent initiatives at the company lend great hope that 3rd Quarter numbers may yield something not seen in the company – profitability. How did this come to be?
After crawling out of a hole with the share price hanging in the single digits, Sirius XM Radio stands at the brink of meeting its potential for the first time in recent memory. Miracle last second financing from Liberty Media & CEO John Malone, coupled with growing merger synergies from the Sirius – XM Radio mergers – has been substantially shifting the numbers during each consecutive earnings release. Couple that with the foresight to move into additional revenue streams – not the least of which is coming from the used car market, and Apple (APPL) iPhone application – Sirius XM Radio is now showing us a renewed vigor.
Sirius XM Radio CEO Mel Karmazin, once heckled for what many forecast was a huge catastrophe (the merger), is now returning to the positive spotlight. Recently surprising investors at the Liberty Media Conference Call – Mr. Karmazin continues to show stamina as he not only turns around the company’s situation – but also fends off critics with one new initiative after the other; Most recently – the Skydock – a radio docking station for Apple’s much acclaimed iPods and iPhones. Steadily and surely moving forward, Sirius XM Radio’s merger and partnership with Liberty Media’s Greg Maffei, may be the curveball the markets weren’t expecting.
Did I mention Liberty Media’s recent acquisition of defunct satellite media company Worldspace’s debt and request to purchase their assets?? Consider if you will that the Worldspace assets are compatible with XM Radio’s infrastructure – and you have to wonder what’s going on behind closed doors. Many of the more loyal satellite radio fans should recall also that those who ran Worldspace were actually founding shareholders in XM Radio.
With all the positives, there are a few questions remaining: How will the certified pre-owned auto numbers hold up? Charges for royalty fees? Additional fees associated with the Premium Online service? More refinancing costs? Any way you calculate the numbers – Sirius XM Radio subscribers and fans are anxiously anticipating the conference call.
The 3rd Quarter Sirius XM Radio Conference Call is currently scheduled for November 5, 2009 at 8:00 AM ET. Members of the online community here at King of All Trades Financial Media will be participating in a live discussion of the event as it unfolds in an online chat session.
It’s no wonder so many are becoming optimistic. Keep in mind this turnaround took place in one of the worst recessions we’ve faced in decades.
Rick
Disclosure – Long SIRI
very nice write up im long sirius and have been very optomistic. cant wait for the numbers!!!!
Looking forward to Thursday’s article. Keep up the great work!
Real nice article Rick. Good to read the truth about a true turnaround story in SIRIUS XM. So much misinformation out there that this was truly refreshing! Thanks! Look forward to reading more of your articles!
profitability????LMAO
You are in the ignorance boat. They never turned a profit, but they will tell you they have an “adjusted net income profit”….you know it’s like bragging to your friends how if not counting your mortgage and car payment you would have saved $2,000 a month…..
You are desparate at best..
as to Q3 report remember the Q3 report in 2008 as everyone was expecting big things post merger and how the stock was going to now sky rocket? LMAO
I’ve read it for the past 5 years and theyare still the same, and al you bagholders keep forgetting when it doesn’t turn out the way you “thought” it would.
you are relentless, no doubt, but you are also 100% woefully wrong for 10 years running….since the really ignorant suckers were buying at $60….LMAO….
Oh and I have to comment on this quote you genius
“Keep in mind this turnaround took place in one of the worst recessions we’ve faced in decades”
Turnaround? See thsi is the classic denial. this company is not in turnaround mode, it is in meltdown mode. 1 Year ago the stock was at $2.50 and the merger was going to drive it to $5 and even $10 based on you pumpers…and here it sits at 60 cents and you are proclaiming a turnaround????
It’s no wonder you’ve all lost you butts, you are incapable of ever seeing reality……so when this stock hits $4.00 on the reverse split you will all be posting how you knew it would make a come back!!! LMAO
superdud the sec, bad economy and short sellers drove this company to this point. I have seen improvement and if you dont your an idiot.
No, these Worldspace assets can give a quick entry into Europe overnight. Worldspace could never run a business as they were into charity work. I can’t wait!
The thing about SIRI is that no one really knows what the potential revenue is. We see comparisons to DirecTV and other subscriber services, but we all know that TV and radio are inherently different and consumers see them as such. Personally, I’ll pay $50 a month for TV, but would consider $12 a month for satellite radio a waste of money. Was the previous high of 19 million subscribers the peak? If not, what is the peak?
SIRI is massively dependent on new car sales for subscription adds, and while new car sales dropped to a projected 9 million in 2009 an eventual bounce back to 14 or 15 million is not out of the question. Couple that with deals for pre-owned and my guess is that 25-28 million subscribers is possible (note: that doesn’t mean it will happen!).
The thing that gives me pause is Liberty’s convertible preferred stock. If they exercised that option it would be a significant dilution of my interest.
I have no insults to offer, just comments.
I am long on SIRI and for good reasons.
The stock price will move significantly higher after Q3 announcements ending the year at around .80
SIRI will be over $1.00 by end of Q1, after this comes to fruition, I promise not to say “I told you So”
To all, good luck with this one and the rest of your investments.
@Superdave
We will laugh our way to the bank while you stand by in awe! Then we will see who is ignorant.