Three Reasons for Sirius Aggravation

by: Brandon Matthews November 18, 2008 | about stocks: SIRI    

Brandon Matthews

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I had thought all day of writing this article. Perhaps it was that my attitude became worse as the day progressed, and other issues clouded my original idea, but I now have three issues to address. Now I’m angry!

I first need to make it clear that I also lost my favorite station (Buzzsaw) to the recent channel changes. I reserved my judgment, however, before I considered writing about it. I have read many other articles, not surprisingly as negative as the NAB-controlled media could muster. You may have noticed the term “elimination” in regards to Sirius XM’s (SIRI) channel offerings used ad infinitum in these knee-jerk articles written by writers of whom I have already expressed my opinion. Of course that word leaves would-be subscribers with the belief that they are somehow getting less for their dollar than they would have previously.

Nothing could be further from the truth. The fact is that the channels were consolidated, not eliminated, and the benefits are many. Every channel I listened to Monday gave the Sirius and XM station that it was streamed to as its identifier. This single act alone leads to the inevitable conclusion that the service just got EASIER to understand. Not everyone is a Satellite Radio expert. Many people would just like to turn on the car and have the radio work. Would you want different FM stations on a Dodge Caravan than in a Honda Pilot?

Let's take a look at your average car buyer and just for argument's sake assume this individual purchased a Chevrolet Malibu. Three years later this same individual buys a Ford. The services were so different that making the transition from one Satellite Radio provider to the other becomes the most confusing part of owning that new car. The new lineup will make it easier for anyone buying any make or model car to easily find their favorite Sirius XM channels. There will be virtually no difference in the new car experience and Sirius XM is a better service today for that simple reason.

The next issue I want to address is the outrageous behavior of a certain group calling themselves “Save Sirius.” I admit I know very little about their agenda, but I do know they are headed by our old friend Michael Hartlieb. I have had several conversations with Michael and I have to say I am very disappointed again. Unfortunately, one issue stands out in mind from out most recent conversation. Michael commented to me with a slightly cynical laugh that he was told by persons at the FCC that, barring his actions relating to interoperable radios, the merger would have been approved back in January.

This means, of course, that had Michael not delayed the merger through actions that were found to be without merit, the merger would have been approved before the economy went into recession. This means that the company would have had 2 extra quarters of combined revenues and decreased costs to contend with the debt issues now upon them. My opinion of the self titled group “Save Sirius” is on par with the actions of C3SR - another self righteous, hypocritical group seeking nothing more than the demise of Satellite Radio. In other words, Michael, you need to remove the plank from your own eye, so you will see clearly to remove the speck from your brothers!

Last, I’d like to address the auto bailout plan. In a word, my answer is NO! Remember when people used to build cars in America. People now build robots that build cars. Engines are made in Mexico. Electrical components in India. Here’s an idea I’d like to see the automakers try. Lower Your Prices! That’s why employee pricing worked so well when it was introduced. If Chevy sold a Malibu for 10,000 dollars, they would not be able to produce enough to meet the demand.

Everyone was excited to see hybrids and alternative fuel vehicles, only to walk away dismayed to learn that any fuel savings was added to the purchase price of the vehicle. No one wants to pay 30,000 dollars for a car with a 5 year life span. It makes no economic sense. Cars and trucks are overpriced. They have become a severe liability to the average American. A brake job on a 2 year old car should not cost 2500.00 to repair. The car companies have been bleeding America dry for decades; it’s time they gave a little back.

Positions: Long SIRI

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This article has 117 comments:

  •  
    Nov 18 07:11 AM
    The UAW will be the demise of the U.S. Auto Industry. In fact, it could be right around the corner. However, as the senator from Alabama stated, "They are dinosaurs and there will be others to take their place". The problems is the 10 jobs connected to every UAW will also disappear. We could see 30 million people out of work if they are allowed to fail before June. Not a pretty picture at all. And where would this leave Sirius?

    Long Sirius
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  •  
    Nov 18 08:02 AM
    I used to work in the Automotive Industry writing software for electronics. Most of those components are engineered here, but are shipped elsewhere to be built...it's just cheaper...and the gap is so big because of the unions. We had a plant at our engineering facility in alabama, new non-union hires made $11/hour whereas the union workers made $30-40/hour. The UAW is only one problem that US companies have. The japanese enter a long term partnership with its suppliers...whereas the american autos tend to try to squeeze every penny out of its suppliers...this method over time gives you a bunch of cheap components made by multiple suppliers that know nothing about the overall architecture of the car....I feel conflicted with the bailout because of my position in sirius...but on the other hand I think the best thing that could happen to these companies is a bankruptcy and restructuring...and shedding themselves of the UAW.
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  •  
    Nov 18 08:29 AM
    You hit the nail on the head on this one, although I think there going to give them the money. Hopefully it will be contingent on retooling towards nat gas cars. Let them go BANKRUPT or give me a new Tahoe for $10,000.
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  •  
    Nov 18 09:28 AM
    Brandon, I can understand the anger at having to bail out GM, Ford, and many banks whose irresponsible behavoir led to thia financial fiasco. I am angry, too. However, letting them go down the drain will ultimately be even worse for us all.

    Looking back in history, to 1929 through 1932, Herbert Hoover felt the same way, feeling that these "panics",as they were called back then, were needed and cathartic for the economy. As the panic deepened, it became too late for conventional recovery methods. It ultimatey took WWII and the preceding militaty build-up to finally bring the economy around to boom times again.

    Do you really want to see one of the few industries left in the country fail and lay off 100,000s of workers and the resulting tricle-down to smaller companies? The snowball effect would be devastating.

    Punish the guilty later. Make new laws to prevent this from happening again but act and act now. Itis a lot bigger than the survival of Sirius/XM!
    Reply | Link to Comment
  •  
    Nov 18 09:59 AM
    Imagine a five passenger, American auto that was built to safety standards, that got 40 miles per gallon,and that had an engine design which would actually permit an owner to work on him/herself. I am remembering a Vauxhal from the sixties that was a great commuter car that was reasonably comfortable and had a sweet 4 cylinder engine that could be serviced by any owner with a worm's good sense. That car got 30 mpg without the benefits of modern weight reduction technologies. Build a similar car with a gasoline and natural gas engine options and a company might not keep up with demand.
    Henry Ford's company reduced the price of his early cars for several years knowing that such a reduction would open up wider markets. No one wants to mortgage a freaking tool that will wear out and/or lose its value before it is paid off.
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  •  
    Nov 18 10:31 AM
    New cars are expensive & thirsty. A tiny Honda Fit, with electronic fuel injection and enough CPU power to run NASA, gets less mileage than my 1976 Chevette (stop laughing) or my 1964 Beetle (okay, enough ROFL.) The reason is weight. There will never be another Vauxhal, because...
    ...7 airbags, Tier III emissions, 5mph bumpers, side impact standards, stability control, ABS controllers, rollover protection, bigger wheels, etc, bring a subcompact over 3,000 lb.
    If you want people to buy cars with Sirius, start importing Japanese Kei-class micro-trucks & micro-vans. Until that happens, I will drink sake and stare blankly at my 89.97% loss.
    Reply | Link to Comment
  •  
    Nov 18 11:18 AM
    I keep watching this stock waiting for an entry point to make back SOME of the money back that I lost, and everytime I'm close to getting back in the stock keeps going lower... .21 are you joking. It is becoming quite pathetic. I would expect a pop before the proxy vote but the way it's looking, I'm not so sure. I'm expecting Weinkes to lower his price target to .15 soon. I really hope I'm wrong.
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  •  
    Nov 18 11:32 AM
    As far as the auto industry goes , it's time to simplify , and get back to basics .........and yes , American workers are going to have to get used to the idea that we might have to abandon many perks and benefits to survive

    As for Siri , the best solution to their troubles is to sell the government 2 or 3 channels for a billion dollars ( or whatever it takes to pay off all debt ) ....I have sent this idea to siri investor relations , I have also just read this same idea on a minyanville article ( so I think it has merit ) ...and if Siri doesn't at least TRY to get government help in exchange for a couple of channels . then it will be obvious they are not interested in truly salvaging our equity ....but must have other objectives

    This is a NO BRAINER ........IF Siri were to sell or lease the government 2 or 3 channels for 1-2 Billion dollars -
    1. Debt would be completely paid off
    2. No need to issue more shares
    3. No need for a reverse split
    4. The short interest would dry up
    5. The PPS would be at 5.00 in a week

    If Siri does not pursue this idea , then something is very F'd up in Melville .........

    I am surprised Brandon or Tyler have not written an opinion / article on this subject ...............we have an elephant in the room that no one is talking about

    What affect do you think this headline would have on Siri stock PPS - " Siri in discussions with congress over bailout in exchange for 2 channels " ....................yo... can bet your ass Siri would never see 25 cents again after that ..........It would pop to a dollar overnight
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  •  
    Nov 18 11:41 AM
    That would be really nice shure46, but may I ask what the government would do with 2-3 satellite radio channels? I just think that if the government really needed channels, this would have came up sometime in the last 10 years or so...
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  •  
    Nov 18 11:55 AM
    31October - yes you are right , there are too many things on todays cars that add to the weight , and to the price of cars ..........I personally would rather not have airbags , and save 2,000 dollars on every car I buy .......In fact , if my airbag ever deploys , all it's going to do is slam my fist into my face , because most of the time I drive with my hand at 12 o'clock on the stearing wheel
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  •  
    Nov 18 11:59 AM
    Hi, They could run a 24/7 "Save America" telethon, OH but only poor Sirius subscribers would hear it and they are already broke.
    I have studied the R/S and no matter how I try I still don't see how it does not ruin investors. Having only 1/50th the number of stocks means you will never see your initial investment again. It might be good for Sirius to be able to again dilute the stock to payoff debt (and screw a whole new batch of investors)
    What they need to do is
    1. Prove they can pay the debt without R/S
    2. Stop diluting
    3. Promise to buy back and cancell stocks
    If these could be assured the SP would rise.
    I am afraid in the future we will be wishing for the "good old days" when Sirius stock was .41
    Or maybe they need a bunch of "game show" channels where someone wins a million dollars every week but you have to have a sub and radio to play. Many Americans currently are using the "win the lottery" retirement plan. This way rather then spending their welfare check on tickets they spend the monthy radio subscription and listen to the radio all day. Can you play "Texas hold-em" by radio, while driving?
    Reply | Link to Comment
  •  
    Nov 18 12:07 PM
    Sirius Long Hauler - Propaganda , Military recruitment , Public service information , Emergency broadcasts , Disaster relief information , Public debates during elections , Call - in questions and answers , Tax code information .............let's say there is an earthquake in Texas ....if you have satrad , you go right to "channel 10" or whatever , and you get details of where to go for help or whatever , without having to search the airwaves waiting to find the public service announcement on some channel at some time ........"channel 10" will broadcast info 24/7 ..............and frankly , who cares what or how they use it ........just buy it !!!!!!! They'll think of something ...................oh , and for all you people that think the government will use satrad for "mind control" !!!! hahahahahah get a life
    Reply | Link to Comment
  •  
    Nov 18 12:32 PM
    yawn-people be quiet and sit in time out

    Now.........

    Brandon Matthews if you read your comments-" Mister Long SIRI"... does that mean your bullish- would you buy more at this price?? Let these prople know.

    If not - be quiet about this stock and go write about how a combination of greed and American apathy towards our fathers and grandfathers make of cars ruined the industry-

    In fact the auto workers of America need to be let go and form a national chain (without a union) of "real "auto mechanics-people that can actually fix the over teched cars without a $100,000.00 machine to fix the crap they make. "30 dollars" an hour plus insurance and fringe to run a robot! come on you are kidding

    I cant get anyone to fix anything properly.Nor can you-The first or the second time.!

    But, dont worry these US grade autos may not work well but by God they will sound good because they have satellite radio..............
    Reply | Link to Comment
  •  
    Nov 18 12:34 PM
    GM's grand idea is to build hybrid escalades for 75,000 dollars that get 20mpg ..........no wonder they are in the crapper

    Hybrids in general are a joke , and no one will be laughing in 5 years when they have to buy new batteries for 5,000 dollars

    and Hybrid Escalades are the mother of all jokes

    If the U.S. auto companies concentrated on building high quality , fuel efficient , gasoline / or natural gas , cars and trucks ...........and the government removed most of the auto standards like airbags ( I know they are for safety , but a seatbelt is good enough for me if it will save me 2,000 dollars on every car I buy ) .........and the auto industry removed perks and benefits ( if you make 30 dollars an hour , you can buy your own health care and save for retirement ) ...... we might as well get used to the fact that the days of perks and benefits are coming to an end ...........if America doesn't get it's manufacturing / exports back , none of us will have a job .........and we now have to compete in a global market .........There is no way American companies can continue to fund pensions and health care .............. AND , I might add , the days of CEO's making 100 million dollars needs to end too ........ especially when their companies are failing .......... that's rediculous

    I know we are supposed to be talking SIRI here , but hell what's new ??? This week Siri sucks 3 cents more / less than last week ????
    Reply | Link to Comment
  •  
    Nov 18 12:40 PM
    How to you like that the man heading a class action law suit (Michael Hartlieb) according Brandon, is reasponsible for most of the problems facing SIRIXM right now. Imagine where SIRIXM would have been if they would have had the merger back in Jan. How many of the people in his law suit, did he tell that he was the one responsible for delaying the merger for 6 months?
    Reply | Link to Comment
  •  
    Nov 18 01:03 PM
    Today must be the next wave of bailers on SIRI stock. Soon no original investors will be around so it does not matter if it go's BK. Most people already have taken their screwing and are over it. If you think Mel give's a S *& t, your wrong. He wins what ever happens to this company. The myth that SIRI would have made it if they had merged sooner is a joke.
    Reply | Link to Comment
  •  
    Nov 18 02:12 PM
    why would you vote for a RS refinancing should take place first. Why not update stockholders on the process. what's management doing? These people make enough money to figure something out. where's the accountability? I don't care if The big 3 goes bankrupt, there's no sound reasoning for siri to be at 20 cents. Someone is shorting the stock.
    Reply | Link to Comment
  •  
    Nov 18 02:28 PM
    I AGREE
    IF MICHAEL HARTLIEB IS PARTIALY RESPONSIBLE FOR THE MERGER DELAY
    LET IT BE TOLD
    HE SHOULD BE ASHAMED OF HIM SELF
    IM HEAVLY INVESTED IN THIS STOCK IM DOWN 98%
    I HAVE SPOKEN TO HIM , JUST LIKE OTHER'S HERE DID
    HE CAN TALK UP A STORM
    HE BOMBARDS ME DAILY WITH EMAIL'S
    IM SICK OF THIS STUFF
    I JUST HOPE HE IS NOT EMPLOYED BY WIENKES


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  •  
    Nov 18 02:31 PM
    Hey Brandon........ answer wcorowitz's question now please!!!!!!If it is possible with a stock less then 1.00 then who is shorting?

    Why is there no interaction with alpha-guys? its like they wave, then throw a bone on the ground -and watch all of you fight over it

    I have written little, I have read alot, and see absolutly anything come out of your own personal interactions.

    I have read some really good ideas in fact-much better then is written and released on the web thru this "alpha" service

    Brandon- you are like the car companies and sirius- elusive ,mysterious, without a true mission ,and untouchable. Whats the point?

    Time for "editor " opinion-otherwise Brandon you have a useless job and probably next on the cut list-Speak to your writers!
    Reply | Link to Comment
  •  
    Nov 18 02:51 PM
    Brandon,

    Your article is so right on, it is scary! I have been reading your blogs for several months now, and some of the critical replies, but I must tell you that this one is the best thing you have ever done. I am a marketing type in the manufacturing world, and your comments about automobile companies pricing themselves out of business is exactly right on. Here is the fallacy: every time a manufacturer starts losing money (or making less profit) they raise prices. Can you guess what usually happens? Sure, less people buy the product. The result is less revenue and, again, even lower profit. So, they raise prices again, and maybe even downsize, laying off some key people. The quality of the product and efficiency goes down (due to overwork of those still drawing a paycheck). Does this cycle sound familiar? Why doesn't it ever occur to do what you suggested? Lower the price and sell more units! This will drive increased revenue and profits. In economics, it is called the elastic demand curve. It won't work in all situations, but it is rarely ever considered. I believe it could work in the automobile industry.
    Reply | Link to Comment
  •  
    Nov 18 02:58 PM
    Another good example of this concept is private toll roads. Toll road operators are always complaining that they are losing money. So they raise prices, and still lose money because after a certain point (the kink in the demand curve), people will not pay anymore for the priviledge of using the road. All they need to do is lower the price to increase usage. The costs are relatively fixed; it doesn't matter how many cars use the toll road. So, the more cars they can get on the toll road, the more their profit. Very simple concept.....but they don't get it!
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  •  
    Nov 18 03:01 PM
    AMEN SURE46!!!!!
    Reply | Link to Comment
  •  
    Nov 18 04:09 PM
    Hey guys. I just wanted to point something out that i thought was pretty interesting, and kind of wondering why no one has mentioned it. Sirius just reported that it lost about $4.8 billion this past quater which was expected, however their revenue actually increased by about $200 million the past 4 or so months. Their subscriber growth grew by about 200 thousand, and this came about during some of the worst months in wal street history. Now i believe that sirius gets much of their business through the auto industry, but, the auto industry has been taking heavy losses lately, and sirius still managed to increase subscriber growth. If the auto industry eventually picks up shouldn't Sirius Xm radio look in pretty good shape(as long as their debt is taken care of)?
    Reply | Link to Comment
  •  
    Nov 18 04:19 PM
    300833,

    You're making WAY too much sense.........

    There's nothing about this stock that's related to sense.......

    I thoink I'm gonna cut my wrist with a dull plastic knife...........



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  •  
    Nov 18 04:26 PM
    Where the hell is cos1000, killer, sl62 & relmor,,,,,,,,,

    This is absolutely insane.

    It seems pretty clear now that we're going to BK, privatization or dilution & RS.

    I can't see how this stock can possibly come back from here. Not with the economy we have in front of us.............

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  •  
    Nov 18 04:57 PM
    I sold at higher levels, im lurking and waiting for a reason to buy. I moved to other action. I said I would buy at .20 cents, but not with this kind of action. Impervious to the market right now, just going down 1 cent a day, or every two or three days. If this stock needs movement, then its going to need to go up at some point. Market will be down this week, will test new lows. Next week will be better. Bailout is important. Bush might be trying to get something through on its back, or making them wait till after hes gone as one last f*** you to Obama., lol.
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  •  
    Nov 18 04:58 PM
    siriusly depressed, why are you calling for cos1000. killer and relmor. Will their bull crap ideas and explanation's keep you in this stock. Like "shorters are keeping this stock down" or "you can't short a .25 cent stock" or "who would short a .25 cent stock". Someone will make money on SIRI. It will not be the original investors. We have already been sacrificed. Fact.
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  •  
    Nov 18 05:10 PM
    remlor and cos1000 are just armchair CEO's. Just smart enough to get you into trouble. The fact is many investors got F ed by this company. Only a few morons like to tout it's comeback even at these prices. Not going to happen. Make sure you guy's still visit this blog after the 50 for 1 split and stock goes down to .05 cents. I will want to here your rationale then. The fact is Crammer as much as I dislike him was right. He new this was going to happen. Product is excellent - company is garbage and in debt up to their eyeballs.
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  •  
    Nov 18 05:12 PM
    Hey guy's, shorts will have to cover at .01 cent. Right. What a joke.
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  •  
    Nov 18 06:18 PM
    siriusly depressed

    I am right here, what can I say today that I didn't say on the last article.... I am fully invested and used my last bit of powder on Sirius today.... What now.... every time the stock goes down your going to blame me.... I have been cautious at these prices and did not say that the stock would pop. I said that only positive news followed by positive analyst reports will move this stock up.... I have pointed out the manipulation at a penny at a time and relayed all that here.... I am as frustrated as anyone, but nothing has happened for me to think the company is going BK. If you go back to when I was in the trader mode 1-1/2 ago, I said that I thought the stock would retest its intraday lows, that's why I left some out to by today. I bought back in last week because I didn't want to be out in case they announce financing. Nothing has changed for me, but it sounds like you have had enough. You need to decide for yourself what to do.

    Up the tail pipe again

    Your bashing only shows your own ignorance..... You know all there is to know and who everyone is and how it all works like everyone else who jumps on this board every day the stock goes down... I'm here regardless of what you think.
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  •  
    Nov 18 06:33 PM
    Up the tail pipe again

    By the way as far as Cramer goes, I already conceded many days ago that we all paid for the education on what Convertible Bond and Arbitrage does to a company's common shareholders, Cramer was probably the ONLY one that was right. Of course I know that you knew the effect that the merger refinancing would have on the stock price back in August. You just failed to educate us all on that point. Your like the sickening sports fan that plays a perfect Sunday afternoon football game every Monday morning. Nice .........
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