Stock Downgrades: Sirius XM Holdings......

Discussion in 'The Howard Stern Show' started by Nemo, Feb 5, 2014.

  1. Nemo

    Nemo Beer Can Thick Gold

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    http://www.minyanville.com/trading-...-Sirius-XM-Holdings-Triumph/2/5/2014/id/53633

    Sirius XM Holdings (NASDAQ:SIRI): More woe for Howard Stern, fresh from being described as looking "like a cartoon of a Jewish female horse" in a recent roast by Lena Dunham. Today Sirius XM Holdings, home of the shock jock, gets taken to Hold from Buy with Wunderlich. Its target price is also taken lower, to $3.80 from $4.20, amid what the broker believes is the lessened likelihood of a deal with Liberty Media (NASDAQ:LMCA).
     
  2. Phillipmcd

    Phillipmcd Active Member

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    Wait, she said that? Should she be around children or not?
     
  3. larryluncg

    larryluncg Empty VIP Gold

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    This is a bit confusing. Are they saying that liberty media is not going to sign stern to a new contract?

    as you know liberty is a 53% shareholder in Sirius
     
  4. Nemo

    Nemo Beer Can Thick Gold

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    I know the answer but I will let someone else explain it.
     
  5. RonHeinzkaboot

    RonHeinzkaboot Adultophile VIP

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    I hope other media outlets refer to it as a roast instead of a Kennedy Centers Honor in his honor.
     
  6. sloth22

    sloth22 Active Member

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    No, there's an offer on the table for Liberty to buy out all the minority shareholders of Sirius. That's the deal he's referring to.
     
  7. larryluncg

    larryluncg Empty VIP Gold

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    Thanks for clearing that up
     
  8. Nemo

    Nemo Beer Can Thick Gold

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    http://www.marketwatch.com/story/on...-inc-nyse-pir-2014-02-05?reflink=MW_news_stmp

    .......... Sirius recovery is evident in its fourth-quarter and full-year 2013 earnings reported on Feb. 4, 2014.

    The company generated record revenue of $1.0 billion and $3.8 billion in the fourth quarter and full-year, respectively, each up 12%. Net income for the fourth quarter and full-year were $65 million and $377 million, respectively, or $0.01 and $0.06 per diluted common share, respectively.

    Income from operations was $245 million and $1.0 billion in the fourth quarter and full-year 2013, respectively. Adjusted EBITDA increased 41% in the fourth quarter to a record $326 million. Full-year 2013 adjusted EBITDA was $1.17 billion, an increase of 27% from $920 million in 2012.

    Potential Lawsuits Generated By Acquisition

    Despite a myriad of law-firm investigations of Sirius XM for potential stockholder claims as a result of the satellite-radio company's proposed acquisition by Liberty Media Corp., its stock price is holding its own.

    On Jan. 3, 2014, Liberty Media make an offer to buy Sirius for about $10.4 billion at a rate of $3.68 per share. The deal involves creating a new class of stock called Series C, adding 0.076 per share to give the company a total market value of as much as $27 billion.

    Although the pending acquisition has triggered a slew of potential stockholder lawsuits, without Liberty Media, Sirius XM might not have been here today.

    That's because in 2009, Liberty Media kept Sirius XM from going bankrupt with a $530 million loan. As a result, Sirius XM has been able to build a subscriber base 25.6 million strong. It's done so with a line-up of paid-radio choices including classical, rock, alternative, country, sports and live concerts, including the extremely-popular morning man Howard Stern serving as the company's anchor. Moreover, having new cars equipped with XM receivers has also boosted the company's popularity and acceptability. However, Sirius XM still faces brutal competition from such digital radio competitors as Pandora Media Inc., AOLRadio and Apple Inc.

    On Feb. 4, SIRI's share price closed at $3.52, down 3 cents from its closing price of $ 3.55 the previous day on volume of 64,729,416 shares.
     
  9. SouthernListen

    SouthernListen I don't follow the crowd. Sorry about that. VIP

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    There was some sort of plan to exchange Sirius shares for Liberty media ones. I suppose that means people think owning Liberty stock (which runs a bunch of other things) would be better than just owning Sirius shares.
     
  10. SouthernListen

    SouthernListen I don't follow the crowd. Sorry about that. VIP

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    Companies like Sirius have a lot of debt. With interest rates currently suppressed very low, profits rise as their cost of borrowing (via bonds or loans) decreases. These profits will evaporate if/when interest rates return to market-set rates or the federal reserve can no longer keep them tamped down. The entire market has seen higher profits despite modest sales gains s in the past few years due to this.

    Siri's current Enterprise Value (market cap plus debt minus cash) is $24.7B , while market cap is only about $21B. With 6.14B shares outstanding that is a "takeover value" of $4.02. So, with the stock at $3.40 it would cost more to buy the shares in a takeover than they are currently worth in the market. Therefore, I guess this means that if a deal to make them Liberty shares doesn't go through, stockholders just lost $.62/share in value.

    Sirius has a debt/equity ratio of 2.1 for the last quarter. This means they owe more than twice what all the shares are worth in debt. For a company that is capital intensive (factories, etc) that would be ok. But it seems to me that Sirius doesn't require that much hardware to run. A few satellites? A home office with some electronics. I dunno.

    Sirius' future seems ultimately dependent on whether or not that technology survives. Will people keep subscribing at about $200/year when you can get music via your phone and bluetooth streaming in your car? Talk radio and news is on the regular radio in most markets in sufficent supply. Music radio is already free over the air.

    Personally, w/o it being included in vehicles for 6 mo I would never have even subscribed, and w/o the HSS and a job that gives me plenty of time to listen I wouldn't continue the subs. Most people are not listening from work, I would assume.

    I'm going to give this one a big "sell", but it's a long term deal. It could ride the wave of cheap money for a while longer.
     
    Last edited: Feb 5, 2014
  11. Nemo

    Nemo Beer Can Thick Gold

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    I was just about to say that, E.F.Hutton.
    :coffee:
     
  12. SillyOldMan

    SillyOldMan Well-Known Member

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    Funny that 4 billion in revenue can only translate to a measly $0.06 cents per share to the shareholder.

    Sirius will remain viable until more unlimited data plans become common.
     
  13. Anyonenow

    Anyonenow Well-Known Member

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    The ONLY reason the stock is at this level(currently) is because of the Pending offer made by Liberty of $3.68.

    [​IMG]