Sirius XM CEO Speaks at Media and Money Conference

by: Tyler Savery October 14, 2008 | about stocks: SIRI

Tyler Savery

About this author:

Become a Contributor Submit an Article

Font Size:
Print
Email

Sirius XM Radio (SIRI) CEO Mel Karmazin spoke at the Media and Money Conference Tuesday, and while there was no “big” news, he did express confidence in the company going forward. With everyone focused on the negative aspects of the markets, Karmazin addressed the biggest perceived weights on Sirius XM Radio and pointed out that the company still has a very viable revenue stream going forward:

DEBT

Karmazin expressed confidence that Sirius XM Radio will be able to refinance the $1 billion in debt that comes due next year. The CEO has remained steadfast in this stance, even throughout the financial crisis that has had the credit markets in turmoil. Karmazin said the company has been working closely with all debt holders.

OEM CHANNEL

Karmazin stated that he anticipates hundreds of millions in revenue from the OEM channel despite weak auto sales. Using a “low-ball” figure of car sales at 12,000,000, he noted that this would still represent 6,000,000 installations that will help generate subscriber growth.

REVENUE

Karmazin is looking for $300 to $400 million in OEM channel revenue next year. In addition, the company derives revenue from the existing subscriber base through their service. Karmazin did not place figures on how the BEST OF programming or A-La-Carte would help the bottom line.

Overall, the CEO remains steadfast and confident in the company as they approach 2009. Investors, who have been beaten up in virtually any sector, may not yet express the same confidence until they see the Q3 and Q4 financials. Getting through 2008 with a good foundation will be important not only to the Street, but to the company as well.

Position - Long SIRI

Car Audio Entertainment: RaySat, AT&T Make Their Move Jan 09, 2009
3 Reasons for Sirius to Take the Interoperable Route Jan 09, 2009
Deathwatch for NYT a Tad Premature Jan 08, 2009
Google and Newspapers Jan 08, 2009
Netflix, Wal-Mart Anti-Trust Suit Raises 'Prickly' Questions Jan 08, 2009

Related Stocks:

SIRI

This article has 28 comments:

Oct 14 04:19 PM
owning this stock is truly a test of fortitude. i truly enjoy the brotherhood of siri sujpporters on this blog. has been a great source of entertainment and confidence. No doubt over time we will all enjoy. that said, mel still being cautious in my opinion. no mention of early response to "best of"? Either not going as well as hoped, or going better and Mel looking to surprise. Sure hope its the latter. also, general comments about confidence in getting the financing done a little disheartening. what ceo wouldn't say that? would have been nice to get some details. i'm concerned the tight credit markets are proving challenging at this point. need some love here brothers...tell me its gonna be ok...:)
Reply | Link to Comment
Oct 14 05:23 PM
This is a revenue generating, bill paying, subscriber growing, expense declining, king of content providing company. What bank would not want to refinance their debt to pay off the converts at a higher interest rate in Feb. 2009, and what bank would not want to continue to receive timely payments on a credit facility for 250M and 100M in May by extending it (not adding to it) at a higher rate. Debt, Debt everyone is worried about this company's debt. What about all that potential revenue from Best of Both, 10M used cars and ala-carte programming?? What about the decrease operating expenses from the merger and increased advertising revenue soliciting to a captured audience of 20M plus subscribers? What about the recovering (and bailed out by the Feds, my prediction) OEM market in 2009 and 2010? I mean we're increasing subs in the worst OEM market in recent history. Can you imagine when they recover?

How was that mydogniles????? Need More????
Reply | Link to Comment
Oct 14 05:36 PM
Mel doesn't want to announce any good news until 3rd qtr numbers are released, probably 1st week of November. Reassurance at this time is not a bad thing. I liked him going after HD Radio by saying that they need to pay their way, not get govt. mandates forcing them and their added expense on car makers and consumers
Reply | Link to Comment
Oct 14 07:18 PM
thanks cos...you scratched that itch...i'm long on siri big time and not going anywhere...
Reply | Link to Comment
Oct 14 09:48 PM
I just finished putting a second beatdown on Rick @ TMF for that horrendous article he wrote (delusionally of course). He had the stones to suggest ClearChannel or CBS would buy SIRI out. Jeez, what a dope!

I liked Mels comments today. He played it exactly as he should. We all know they've been in talks. I mean, that's a given!! They've got a deadline coming up. I assume no one here would assume Mel would just now be starting to strategize that detail. So he said what he needed to say today. Once those details are final, we'll get the news. Like cos1000 says, you have to let management do their thing. People would like more communication, but that's not prudent for any company to do--to discuss internal company business in the media. Be patient and it will come. This management team is not stupid. They know what they have, what they need to do and how to get it done. I haven't heard/seen this before but the last two days during Power Lunch on CNBC, they specifically addressed their Satrad listeners while on the air. There are all kinds of little things like that I see every day.

To build on cos1000...
As I've said, they will be a 10 y/o company next year with a proven solid track record, showing solid proof of growth and viability. Debt issues aside, their FY net sales and revenues for the previous 5 years are:

FY2007 FY2006 FY2005 FY2004 FY2003
922.07 M 637.24 M 242.24 M 66.85 M 12.87 M

From the the Q2 10Q six months ended was:

June 30, 2007 Ended June 30, 2008 $430,464 M $553,367 M / Cash of 220,133 M...

SIRI is just a growing company and has proven it for 10 years--period--while NEVER DEFAULTING and making all payments. They also have a good record on meeting or beating eps estimates and a great record of growing their core competency of relevant and intriguing content. Now with the new sub base, synergies, new growth potential of the new entity, solid OEM partners that virtually guarantees their revenue, etc... they have to be considered attractive to potential lenders. From what I've heard they're Fitch rated TrippleC due to their high debt. But when all things are considered, they don't look too bad and seem a great risk. Their rate will be higher no matter what, but just as long as it's as low as possible to make fiscal sense.

IMO, I agree with cos1000 that they should announce this new financing sometime in November either with earnings or on the call--which most likely will be a few weeks later, if at all possible. Be proactive with it, be ahead of the naysayer demise curve. That kind of news also gets them out of the media stockade and gets them much better press, which can only help branding, image and future sales while inviting new investor money and raising that market cap back up. Plus, our jobs will be easier not having to do so many beatdowns on idiots like Rick, Doug or all the rest!! (lol). Why the company is continually dogged by so many idiots amazes me. But it's our job to insert shoe up arse. As said before, for once I would invite one disbleliever to show me and this community one legitimate scrap of fact or evidence that supports their uneducated theories of bankruptcy, reverse splitting, defaulting, stock going to zero or any of the other spewed tripe. Thank you!
Reply | Link to Comment
Oct 14 09:51 PM
Q2 Six Months Ended was supposed to read:

June 30, 2007
$430,464 M

June 30, 2008
$553,367 M / Cash of 220,133 M...

Reply | Link to Comment
Oct 14 10:15 PM
sl62 and Cos1000.................. you boys never cease to amaze or deliver when it's all on the line. My stetson's off to you both. Thank You. PS................. the Dog is resting.
Reply | Link to Comment
Oct 14 10:28 PM
Tried to sell a large number of shares this early morn at .57............. wanted to buy back under .50 . Naturally the market headed south and never looked back. Sure would have been good for my average. I had a really good feeling about getting it done today too. Oh well, will try to make something happen tomorrow. Will keep you updated. Good luck on your trades. .. killer.
Reply | Link to Comment
Oct 15 08:24 AM
killerkaul, Monday I sold 20% of my shares at between .53 - .54. I am hoping to get them back in at around .41-.42 before 3rd qtr announcement. Good luck my friend and keep the Big Blue Dog ready to run starting in early November after the call.
Reply | Link to Comment
Oct 15 09:25 AM
Cos................... sure can't fault your logic. Good luck on that. killer.
Reply | Link to Comment
Oct 15 11:12 AM
Cos...................... looks like you'll be able to make your sell today with plenty of time to do it again. Wish I hadn't been so greedy on my sell price yesterday. killer.
Reply | Link to Comment
Oct 15 04:06 PM
ouch!!!!!
Reply | Link to Comment
Oct 15 08:03 PM
killer, Held firm at .41 an couldn't buy a thing. Will see how tomorrow goes? Being the greedy SOB I am, I've changed my by to $.39. I think we are not out of trouble yet. Not because of performance, but because of fear and no company communication. I don't think that's a bad thing but, left to our own thinking in this market, we are a cautious bunch of investors.
Reply | Link to Comment
Oct 15 08:14 PM
Just a comment about this new format from SA. It Suuuuuccccckkkks! I like being able to touch on previous posts, but I can't find the posts I want on current articles. I'm getting old and blind so this is a real pain in the a$$. OK I'm done. Time to watch the debate.......
Reply | Link to Comment
Oct 15 09:39 PM
Sirius XM (SIRI) has laid off about 80 former XM employees based in the former XM headquarters in Washington, D.C., according to the Washington Post.

The Post says that the cuts included “many of the on-air voices and program directors of the service’s most popular music channels,” including the staff of its Decades channels - hits of the 40s, 50s, 60s, etc. - and its black music channels.

Reply | Link to Comment
Oct 15 09:40 PM
Sirius XM (SIRI) has laid off about 80 former XM employees based in the former XM headquarters in Washington, D.C., according to the Washington Post.

The Post says that the cuts included “many of the on-air voices and program directors of the service’s most popular music channels,” including the staff of its Decades channels - hits of the 40s, 50s, 60s, etc. - and its black music channels.

Reply | Link to Comment
Oct 15 10:42 PM
Siri, go up! So What.... what is your point.....
Reply | Link to Comment
Oct 15 10:54 PM
Cos,,,,,,,,,,,,,,,,,,,... you may get real lucky tomorrow, and get it that low. Keep in mind your averaging down goal. 20% of your total at these prices would be phenominal!!!!!!!!! I hope you can pull it off. ......................... debate, unfortunately, was no better than the previous three. ....lol. ...... .. killer.
Reply | Link to Comment
Oct 15 11:11 PM
killer....... , Who knows? Its hard to let shares go at this time but, I agree with what Relmor has said about not putting New Money in and Maximizing existing money to get more shares when the opportunity presents itself. Hopefully that will happen.

I feel like a "Short" with this strategy and it has me feeling unsettled.... The Dog won't look me in the eye right now.... and I understand..... we all gotta do what we gotta do ...... It just doesn't feel good.... The extra biscuit I through didn't do any good....
Reply | Link to Comment
Oct 16 08:01 AM
SEC Imposes New Short Selling Rules:

www.sec.gov/news/press...

The Commission's actions will apply to the securities of all public companies, including all companies in the financial sector. The actions are effective at 12:01 a.m. ET on Thursday, Sept. 18, 2008.

"These several actions today make it crystal clear that the SEC has zero tolerance for abusive naked short selling," said SEC Chairman Christopher Cox. "The Enforcement Division, the Office of Compliance Inspections and Examinations, and the Division of Trading and Markets will now have these weapons in their arsenal in their continuing battle to stop unlawful manipulation."

There is more in the article and additional rules that were adopted. The complete set of rule changes are located at the link above.
Reply | Link to Comment
Oct 16 09:41 AM
Cos........... I know how you feel, however, this is about the only thing I can think of that improves our chances of breakeven, or minimal losses, or maybe a small profit if some of the worst scenarios eventually play out due to this recession/depression,l... buyout,unforseen terrible company news, etc. etc. etc. { basically murphy's law coming to fruition}. Just trying to cover more bases ,if these slimmest of freak occurences happen. And on that chear filled note. The best of luck on your trades. killer.
Reply | Link to Comment
Oct 16 09:50 AM
s162 - I am long siri and hope for the best ...but I am a realist , and your above post was very good , but you are definately naive if you think there is no way siri could go BK or reverse split .........evidence ????? read the profit / loss column .........if siri does not get that pesky minus sign out of that figure , then whadda ya think is going to happen ????? Siri can have 50 billion subscribers , but eventually they need to post a profit ......the absolute best thing that could happen to Siri is an improvement in earnings ....which happened a few months ago ......still negative earnings , but a penny improvement ...........7 more pennies to go , but profit / loss is king ..........so while I am optimistic , and hope for the best , I certainly understand BK or reverse split are not out of the question ....and there's no sense telling me Mel said this or that , because Ken Lay said plenty of good things about Enron !!!!! This crack down on naked shorts might be a very good thing ....hope so ......maybe get siri above a buck soon .....I am sure manipulation is doing a lot of damage right now , and it would be great to get that out of the way ...........but truly , eventually , earnings have got to improve ....and hopefully , they will .........I am no number cruncher , but hell even I know a company has to eventually make some money .......wouldn't it be great if Q4 had an improvement in earnings !!!!
Reply | Link to Comment
Oct 16 09:59 AM
should say lowball buyout above......
Reply | Link to Comment
Oct 16 07:28 PM
Had a buy set at .38 today. Had to leave at noon,so caved and reset at .39. So ended up w/ a buy of 10,223 shares at .39, and again I find myself out of ammo. Dead bodies everywhere............... drug and stacked a wall of flesh up and around the Dog and I . He's resting now. You should have seen him........ a tireless killing machine, every time he made a charge, the masses would bleed back ............. just as if he was parting the seas of Moses. I swear the Dog is worth 200 men, maybe more. We'll hunker down here and wait for reinforcements. If they realize the state of my ammo, they'll be all over us. Tired...... must sleep. It'll be ok.............. nuthin gets by the Dog. .. KIller.
Reply | Link to Comment
Oct 17 12:53 AM
Shure46...

Thanks for the post. Hey, someone actually took my challenge. For that you get respect. However, your facts are not entirely valid. SIRI said this year they expect to go positive EBITDA by the end of '09. So you have to take them at their word. Sadly this merger and newly acquired debt has dogged them into this hole. Explain to me their stock price the last 5 years with no positive earnings. See? There's your proof that the P&L so often is not the main thing when it concerns public companies. Sure, it helps and is preferrable to be cash/debt positive--no one will deny that but many public companies are not and still maintain a respectable stock price due to belief in the company and their future. The fact is, that's what investing is all about. People invest mainly because of what MAY or what they EXPECT to happen sometime in the future--which ususally amounts to years. Hence growth and spec--which represent a whole lotta stocks.

However, all that is now changed regardless. The company has announced some things today that are very unhealthy. They appear to be throwing shareholders under the bus--which is not cool and something I never would have fathomed from Mel. I'm disappointed and will show the company that. Maybe in the midst of a global financial meltdown, there was no choice and which no one could have thought would get so severe. But now the call has been made. I still maintain that in the absence of this current economic climate, this debt of theirs would already be out of the way and the stock back on it's prior course somewhat. Didn't happen that way though--it's been a perfect storm not in our favor.
Reply | Link to Comment
Oct 17 12:24 PM
The Dog and I have been stripping the bodies of the dead for any and all items we can use, as we may have to hold in this place for some time to come, I realize this may be a very, very long wait for help or reinforcements that may, or may not be coming. We have quite a store of food and water, and will continue hunting for more. Luckily the Dog has a fine sense of smell, he has been a lifesaver, as all I can smell is the death that is all around us.. .................... Our situation appears bleak.................... . however, I will not give up on the Dog............. I owe him at least that much. If we are to die here..................... it will be together. .. killer.
Reply | Link to Comment
Oct 17 05:21 PM
s162 - yes my friend , the perfect storm has taken a turn for the worse ....and yes , we are about to be thrown under the bus .......and yes I definately understand that a company can lose money , yet hold a good stock price .....but NOT when they NEVER make a profit .....oh sure , they have massive cash flow , but the problem is that they always need an influx of borrowed money ( sort of like our nation !!!!! ) anyway , you probably know a helluva lot more than me .....but today's news is the "proof" you were asking for .......Mel is going to do at least a ten for one split ....maybe twenty .......geesh ..........$60,000 has turned into $6,000 for me ............I just can't get myself to sell now !!!!!!! I prefer to sit on it for 5 years .........but after the split , the shorts will have MORE cushion .......crap !!!!!! what to do , what to do
Reply | Link to Comment
Oct 17 05:23 PM
OH , and you wanna hear something really whacked out ????? I bought 1,000 more shares the other day at .50 !!!!!!!! and STILL LOST MONEY !!!!!!!!! NOW ITS .39 !!!!!!!!!!!!!!! If it weren't so funny I'd cry !!!
Reply | Link to Comment