When Does Sirius Follow Circuit City And GM To The Bottom?

[marmar]

from 24/7 WallStreet:



November 10, 2008
When Does Sirius Follow Circuit City And GM To The Bottom?


Circuit City (CC) and GM (GM) has effectively proved a point about the current economy and credit markets. Without substantial positive cash flow and operating earnings, raising money is nearly impossible. Corporations which already have a large amount of debt on their balance sheets are particularly unlikely to find financing.

Earlier today Circuit City filed Chapter 11 and GM's share price target was dropped to zero by Deutsche Bank. The nation's largest car company will either run low on money early next year or be forced to raise money in a fashion that will wipe out common shareholders.

The news from the consumer electronics and car companies pushed CC shares as low as $.11 against a 52-week high of $8.24 and GM's down to $3.02 against its 52-week high of $32.80.

The question is which well-known US company will be next into the credit gauntlet. The answer is that it will probably be Sirius XM (SIRI).

The combined debt load of the merger Sirius and XM is about $2.5 billion. Together they had operating losses of about $150 million in their last reported quarters. They now say that the slowing new car market will cause them to miss their revenue targets for the next two years.

Sirius XM expects no free cash flow in 2009 and $400 million in 2010. If the recession deepens, those numbers are likely to be at risk. The company says it is in discussions with several financial institutions regarding a financing to replace its 2-1/2% Convertible Notes due 2009. There is absolutely no reason to believe that those negotiations will be successful.

We have already noted how the company faces listing issues, and there is this new lawsuit which is going after management to keep it from causing the ultimate harm to shareholders. The satellite radio company needs to dump some of its debt. Chapter 11 may be the only realistic way to do that now.


http://www.247wallst.com/2008/11/when-does-siriu.html

[corkhead]

1. I am on the verge of dumping xm, if they do anything to try to extract another nickel out of me,

I am history

[onehandle]

2. If you threaten to leave, they will let you coast at $4.99 a month for three months.

I've done it twice in a row,

[XOKCowboy]

3. Hmmmm

My subscription is about to expire... Sounds like a plan. Thanks.

[maxsolomon]

4. i just don't get satellite radio

my bro has it, and it's just not THAT great. my ipod with 13000 songs on it makes a killer mix on its own.

[XOKCowboy]

5. IPODS get a little boring when you're driving all day

Plus no news or sports. That's when I'll miss my XM. My subscription is coming up for renewal and I don't know if I can budget the cost. I'll sure miss it on those drives through Nevada and Kansas.

[maxsolomon]

9. i guess if you drive that much

i'm in the car 45/day commuting, and most of that time a female is talking at me.

[TahitiNut]

16. The monthly cost of a female is higher than Sirius.

:dunce:

[Donnachaidh]

6. I think in the beginning they thought it would take off like cable

And it hasn't.

WHY pay for something you can get for free, finally sunk in for consumers. :shrug:

[HeraldSquare212]

7. No, I love it. Regular radio is worthless and I don't care to buy a lot of CDs or MP3s.

[CatholicEdHead]

18. Not Public Radio

Of course I am really spoiled with MPR's offerings.

[onehandle]

8. No commercials is well worth the price.

If they could figure out how to do that with cable, I would welcome an increase in my cable bill.

[Renew Deal]

14. You don't get the content of Satellite radio for free

At least not in one place and not without commercials and not uncensored.

[Renew Deal]

12. Your iPod has no original content that you don't put on it.

No radio show
No new music
No old music
No live sports
No weather
No news channels

You can get all of these things if you spend the time to download them, but by then it's old information. Satellite radio opens up the spectrum of information and entertainment live.

[maxsolomon]

15. the older i get the less i care for sports & news

and the weather is available from many sources including a barometer.

i listened to XM for a week with my bro in montana. wasn't that impressed as far as new or old music content. i'd be interested to hear programs such as dylans's radio show, but i'm just not motivated to add yet another bill to cable, ISP, land line & cell.

and by paying for an ISP, i'm getting tons of radio & satellite feeds on itunes.

to each his own.

[Romulox]

17. You've heard every song on your own Ipod...nt

[nichomachus]

19. I have both an iPod and Sirius

I prefer Sirius because you don't have to distract yourself from driving to change music

Also, where I live, your radio choices are Jesus, Spanish, and Spanish Jesus. Along with a couple of crappy rock stations where the DJ's scream at you most of the time.

[tomreedtoon]

10. Satellite radio is freaking repetitive!

I had occasion to rent an Anti-Christler car for a vacation around July 4. The car came with Sirius. I listened with my friends all the way from Orlando to Atlanta and back.

The shows were repetitive. There were few live hosts, except for the repeat talk shows from Howard Stern and Bubba the Love Sponge. The rest was canned stuff, played back by automation, and it was repetitive and uncreative. Sirius is like having eighty channels of Muzak, the kind of accompaniment you would expect in Hell.

Great technology, lousy implementation.

[sixmile]

11. It's already been shorted beyond belief

I bought (stupidly) right after the merger with XM and have watched my investment shrink by 75%. One can hope the perceived value of the product will help the stock price in the coming months.

[Mike 03]

13. I bought SiriusXM at about $1.40 a share and I'm afraid to even look at it now.

I hope Sirius/XM can hold on. I was an early subscriber to both and, as someone who does not have cable television, I literally have either one or both of them on all day, every day. I take it with me when I go walking or walking the dog. I carry a portable in my emergency kit.

In addition to all the news and talk programs, there are several channels that are unlike anything I've ever heard before, such as the P.O.T.U.S. channel and the ReachMD channel for medical professionals.

I love the whole concept of satellite radio, especially living out here in the boondocks where I can barely receive AM from even the nearest major city.

I have three portables and one boombox unit.

[tbyg52]

20. Noooooooooooooo!

XM is the only way I can get Air America and C-Span! Plus it's built in to my and my husband's cars, and I don't want a piece of non-functional equipment in my dashboard! (But this is a secondary consideration to Air America and C-Span.)