By Relmor Demitrius

Greg Maffei

Sirius XM Radio (NASDAQ:SIRI) is offered many opinions of what their shares are actually worth.  It just depends on who you listen too.  There seems to be a vastly different view of just how much one should pay for this equity and ultimately what is their appropriate market cap.  If readers know my style, they know I do not work with subjectives or opinions.  I like cold hard facts when I tackle a problem.  The pulse of the investor community seems to be right now on trying to understand how an equity so obviously undervalued is still priced at $1 a share.  What is Sirius XM’s real fair value?  Well why waste a second longer, let us begin.

Without boring anyone on just how dangerous it is to attempt to use the stock market current price at any one time to try to determine actual retail sale value of a company and hence what one share is actually worth in reality (meaning if every share were to be purchased at one time, at what price could they buy the company) might offer a little insight.  Here is a good example of this from 2008. (more…)

By Relmor Demitrius

Sirius XM Radio (NASDAQ:SIRI) CEO Mel Karmazin is like a kid in a candy store these days.  He came to Sirius Satellite Radio in 2006 with the stated goal of combining the only 2 satellite radio companies, XM Satellite Radio was the other, into the vision its founder Martine Rothblatt envisioned in the first place:  One satellite radio company.  The FCC thought it knew better in the 90’s and awarded spectrum to two companies instead, even after insistence from Martine that it wouldn’t work with two companies. To him the concept simply only worked for one company, and 10 years later it turned out he was right.  With Sirius and XM both struggling to monetize billions invested due to competing costs associated with signing talent and OEM contracts, they finally merged into one company in July of 2008, after the longest merger delay in FCC history.  Regardless of the FCC’s attempts to sabotage these companies from day 1, Mel finally has his wish.  A combined satellite media giant to control and run with the efficiency it was always intended.  (more…)

By Steve Garcia -

As previously speculated in past articles, Liberty Media (NASDAQ: LCAPA, NASDAQ:LINTA) essentially confirmed they have plans in the works to take their satellite radio interests global recently.  Liberty Media CEO Greg Maffei answered a question after his company’s 4th Quarter Conference Call regarding Worldspace (OTC: WRSPQ) and Liberty’s acquisition efforts aimed at Worldspace assets through Bankruptcy court.  Among his comments was a statement that Worldspace has L-Band spectrum licensing worldwide, and that they were looking for a creative way to monetize Sirius XM Radio,  converting their  shares in the company  is not an option they are likely to pursue at this time.  As a matter of fact, Mr. Maffei said that Board Chairman John Malone would be firmly against that option.

Looking at the broader picture, Liberty Media has an important connection in Europe through Liberty Global (NASDAQ:LBTYA, NASDAQ:LBTYB), which has dealt intensively with licensing and programming transmission regulations with many member countries of the European Union (EU).  With Worldspace having L-Band spectrum licensing globally, and both the XM infrastructure side of Sirius XM Radio and Worldspace having come from the same technologies, it’s not a big leap to speculate that the XM side of Sirius XM is a key part of the globalization planning.  Worldspace broadcasts in the 1467-1492 MHz frequency range of the “L” band, and Worldspace’s proprietary and patented technology is coincidentally used in each XM Radio receiver.  In fact, the Worldspace Global Content and Programming department used to provide approximately 10% of the original content music programming heard in America on XM Satellite Radio. (more…)

By Relmor Demitrius -

Sirius XM Radio’s (NASDAQ:SIRI) stock price has been on a positive uptrend as of late.  Since January the stock has increased from 60 cents a share to $1.18 earlier last week, which is almost a double.  It closed Wednesday near its 52 week high, on high volume.  In fact, volume has increased since the new year began.  Volume picked up even more in late January when Sirius XM released a press release giving a few details to their upcoming Q4 report, which will be held before the market opens, on February 25, this Thursday.  A lot of journalists and analysts have given their opinions as to why the run has occurred.  Speculation is running high right now regarding this equity before its conference call, which incidentally will be on the same day Liberty Media is having their conference call as well.  Since Liberty Media purchased 40% of the company through Liberty Capital (Nasdaq:LCAPA) in February of 2009, Liberty and Sirius XM have had different conference call dates.  Combining the conference call dates has only seemed to add to this speculation.  As usual when speculation is running high, one should try to break down things to their most basic levels, and just try to look at facts, or at least angles that can be supported by facts.  Lets do that now and see if we can’t get a handle on this price jump.

Why has Sirius gone up so much in 2010?

Well, I don’t think there is an easy answer, as some writers are offering.  I think it is a combination of a few fact based occurrences, wrapped into the complexity of market psychology.  Interpreting these facts can lead to a logical conclusion of this recent price action.  In this interpretation I will go forward with one assumption.  That Sirius XM shares are in demand by institutional investors.  Although it is a strong assumption also supported with facts, it is still an assumption never the less at this time.  To buy any stock however, once should assume this to be true, first and foremost.

After Sirius XM released their Q2 results, the stock had traded in a downtrend.  Despite improving cash flow, cutting costs, and refinancing debt (including removing the Liberty loan of 15% entirely) the stock still could not gain new highs.  Volume began dropping, as the same price range was offered repeatedly throughout September through the month of December.  There was no real news during this period to drive the stock price.  Only doubt and fear seemed to linger.  As the date to trade over $1 approached, Sirius XM needs to trade over $1 for 10 straight trading days before March 15th to avoid being delisted by Nasdaq, of which they now have logged 5 straight days, and the stock seemed stuck in the 50 and 60 cent range, buyers seemed intent to wait it out, to see if the reverse split/bid price rule requirement situation resolved.  (more…)

By Relmor Demitrius

With a possible historic profitable conference call now around a week away, shares of Sirius XM Radio (Nasdaq:SIRI) are finally trading over the $1 mark for the first time in over 1 year.  This is welcome news to Sirius XM long term investors, as the chance to avoid a reverse split is now within reach.  Stock still has plenty of time to log 10 trading days over $1 before the March 15th date, even removing the need for the company to file an exception request, which Sirius XM has hinted at they would very well do if so needed. 

No specific news relating to this recent move, but a steady combination of news events has allowed reality to begin to settle in on the stock price of late.  With most EBITDA evaluations coming in way over the current trading price, any up move in this stock is not surprising.  With recent S&P corporate credit rating upgrades, Blackberry application release, and a press release from Sirius XM in early January confirming free cash flow and gains in their subscriber base, has helped move the stock in the new year. 

The stock began the year trading at 60 cents, and has never looked back yet.  Sirius XM has dramatically improved their balance sheet in 2009, so any stock gains are not unexpected, if not long over due.

Mel Karmazin, CEO of Sirius XM Radio, and Liberty Media CEO Greg Maffei (Nasdaq:LCAPA), which owns 40% of Sirius XM Radio, have confirmed reports recently of a global plan, which would include the services of Sirius XM Radio.  With recent Ford commercials citing a “global” Ford, and featuring Sirius Satellite Radio, speculation of possible additional revenues from a global venture has sparked interest in the common.  As a long term investment, regardless of recent gains, the future seems bright, and opportunities for global growth is definitely a real possibility.  Worldspace assets, which already has transmission rights in Europe, Asia, and Africa, are being controlled by Liberty Media, and a plan to move forward should be coming soon from the company.