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Liberty Is Not Acquiring Sirius XM, They Already Own It


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  • By Relmor Demitrius

    For the life of me I can't understand why journalists, and I use that term extremely loosely here when considering the coverage of Sirius XM Radio (NASDAQ:SIRI), cannot understand simple math and facts. If I hear the NOL's mentioned one more time as why Liberty would take over Sirius XM, I'm going to scream and throw something. NOL's are 100% for Sirius XM to use, will be used 100% by Sirius XM, and has no value directly to Liberty. This is from comments from Frear (CFO of Sirius XM), Mel Karamazin (CEO of Sirius XM), and Greg Maffei (CEO of LCAPA).  There is NO SCENARIO PERIOD that allows Liberty to benefit from them except as an indirect 40% stakeholder in Sirius. It gives their holding more value, as profits are protected till around 2020. That's it. That is the only benefit to the company and Liberty. LCAPA can't spin off, spit off, crunch off, roll off, spit off, or any other form of off to make them any other way. So stop it. Stop it right now. Stop your incessant babbling and learn how to understand simple concepts. And they are not valued at 8 billion, its more, and its around 3 billion in cash value. NOT 8!!! There is no magic way to add 8 billion to the asset line. It comes in small chunks !@#$avings on profits that would have been paid to IRS.

By Relmor Demitrius

 

For the life of me I can't understand why "journalists", and I use that term extremely loosely here when considering the coverage of Sirius XM Radio (NASDAQ:SIRI), cannot understand simple math and simple facts. If I hear the NOL's mentioned one more time as why Liberty would take over Sirius XM, I'm going to scream and throw something. NOL's are 100% for Sirius XM to use, will be used 100% by Sirius XM, and has no value directly to Liberty. This is from comments from Frear (CFO of Sirius XM), Mel Karamazin (CEO of Sirius XM), and Greg Maffei (CEO of LCAPA).  There is NO SCENARIO PERIOD that allows Liberty to benefit from them except as an indirect 40% stakeholder in Sirius. It gives their holding more value, as profits are protected till around 2020. That's it. That is the only benefit to the company and Liberty. LCAPA can't spin off, spit off, crunch off, roll off, spit off, or any other form of off to make them any other way. So stop it. Stop it right now. Stop your incessant babbling and learn how to understand simple concepts. And they are not valued at 8 billion, its more, and its around 3 billion in cash value. NOT 8!!! There is no magic way to add 8 billion to the asset line. It comes in small chunks !@#$avings on profits that would have been paid to IRS.

Another simple concept running out there that cannt seemingly be made clear is that Liberty doesn't already control the company direction. As a 40% preffered stockholder with veto rights on major cash usage, they already control the company. They paid zero dollars for their stake and would be foolish to throw good money into it just to acquire a controlling stake. Reason they didn't offer 50% in the first place. Reason prices .05 cents to $2.44 were ignored by Liberty to add to 49% , which they could have from day 1. Greg Maffei said it himself, stupids. Why would we acquire shares now, when we ignored them for so long? Exactly Greg. Common sense is in order.

Another stupid theory is that Liberty will tender for 100% of the company and take it private. Unbelieveable, unprecedented in how Liberty handles their assets, and also very stupid. Take on 100% of the risk versus 40% ownership with no risk? Who's that stupid? Why pay another 8 billion dollars to buy out the company? You realize how long it would take them to cash out 8 billion dollars in Sirius XM with their current cash intake minus debt? Around 10 years at current levels. Or Liberty can stay 100% in profit range for 100% of the entire time they hold the company. What would you do?  Keep in mind Liberty owns 100% of very little.

Sure, Liberty could acquire a 10% stake if they don't like how the board room is working out for their vision, but they are a hands off owner, so that is the least likely scenario out there. If they acquire a 60% stake you wouldn't have to sell your shares, they would still trade and would be more valueable as more shares are out of the float. Tired of stupid authors not seeing this, mentioning this, or seeing the scenario it would require to produce this result.

Another stupid theory running around right now is that Sirius XM will miss their Q4 sub guidance. Obviously these people don't know about production subs, the used car market success, or failed to become aware of declining losses in the retail side of the metric. Either way, they can't do simple math. OEM adds for Q4 2011 will be around 600,000 minimum. Thats minimum. Now subtract maybe 100,000 retail side loss (typical every quarter) and you have your 500,000 subscriber addition quarter. Mel also stated they will meet guidance last time he talked. So saying a miss is coming makes for good clicks, but it doesn't help you as an investor when an "expert" misses a simple math problem. Don't forget, used car promo subs were never counted as a promo sub, hence will appear like magic directly to the self pay subscriber totals. These authors also fail to mention this fact.

Sirius XM buying Pandora is probably the funniest thing I have read lately. Talk about desperation as a Pandora stockholder. No, no one is going to buy your company. Sorry. You have no assets, hence nothing to value. I don't see any acquisition out their more valueable right now that a buyback would offer. Mel stated a buyback is coming, so don't expect it not too. It would be stupid. Would Liberty hinder company growth or appeciation of their stock holding? No, that would be "stupid".

 

Disclosure: Long SIRI

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