The Sirius Story in Two Sentences
by Peter Kafka
Posted on December 28, 2008 at 7:01 AM PT
Today’s New York Times profiles Mel Karmazin, Howard Stern and Sirius XM (SIRI), the troubled company that binds both of them together. It’s a nice read, but there’s no news there for anyone who has been watching the company over time (if you want an archive of excellent Sirius coverage, check out Digital Daily).
And if you’re time-pressed (it’s 64 degrees in New York City this morning–perhaps you’d like to get outside), there’s no reason to tackle the entire feature story. Because reporter Tim Arango has done a nice job of summarizing his 2,427-word piece in two sentences:
But Sirius XM does have a serious flaw in its capital structure. Its costs, which include servicing its pile of debt, appear to be too high to make the business viable.”
Comments
Wow, big surprise, this company is a carcass, it’s just sad that the media–you included Kafka–keep featuring it…I know from experience it’s got a ton of shareholders, all bitter, ravenous for more info to make them feel better about their idiocy, so each mention gets a ton of hits, but you gotta just ignore that temptation and let it die alone, like its executives soon will (business-wise)
Posted by Timothy Sykes at December 28th, 2008 at 7:23 amLike I said, you can sum it up in two sentences. But the NYT piece is a really nice summary of the company, which is fascinating for many reasons. This thing looked promising to a lot of people not very long ago, and it’s worth dissecting why a service with some 20M subscribers is near death.
Posted by Peter Kafka at December 28th, 2008 at 7:35 amPeter, as every English teacher will tell you, the summary of the story is at the end.
“You have to play the hand you’re dealt,” he says in the interview. “Right now, I don’t like my hand. But we’ll play it.”
The article said nothing about Short Sellers driving the stock price to 11 cents. Too bad, because that’s the story at SIRI and a few other companies.
But since you only steal other peoples work, it doesn’t shock me that you would miss it.
And remember Madoff was considered a genius at investing.
The story of 2008 was about thieves Peter. White collar theft. Don’t miss it!
For your next story, try stealing the text from Fox News, Bull’s and Bear’s Saturday show in which Gary B. Smith predicted Fannie Mae (FNM) is going to $10
Posted by Jeff Stevens at December 28th, 2008 at 8:01 amOK fair enough…gotta love these morons who wanna blame short sellers fro their lack of a balance/sheet/sustainable business!
Posted by Timothy Sykes at December 28th, 2008 at 8:42 amTim were you referring to SIRI or the NYTimes? Nothing has changed since the merger was announced except the stock price.
Posted by Jeff Stevens at December 28th, 2008 at 10:53 amThe Goldman analyst constantly downgraded SIRI while SIRI was increasing revenue and lowering the loss. Goldman also runs a trading desk. And Goldman owns most of the Feb debt. No one is predicting SIRI will go chapter 7. They mean reorganization Chapter 11. And Stern isn’t in a union, he still gets paid.
Tim, who benefits in Chapter 11? debt holders like Goldman Sachs.
I’m referring to SIRI and ALL their media coverage, they might deserve it since their products are widespread but their stock is and has been useless for several years…it gets sooo many stories, so many people analyzing it only because it brings in hits…of course those hits are dumb hits because anybody who is invested in this carcass is clearly dumb, even dumber than most
Posted by Timothy Sykes at December 28th, 2008 at 1:01 pmwow. litle timmy sykes is here. woohoo.
true – not so bright people are holding on to SIRI, and i don’t think that the stock price is so low because of short sellers. i do find it puzzling, though, that so few mention the fact that the glaring reason for the tiny stock price is related to the debt refinancing. the debt issue would be a non-issue if the merger approval hadn’t taken 18 MONTHS to go through.
20 million subs. ridiculous that it is at this price.
c’est la vie.
Posted by frankie cooper at December 28th, 2008 at 5:07 pmOkay- true story. I own a Mercedes, which I bought 3 years ago. Mercedes has their satellite agreement with Sirius.
Posted by Ed Katz at December 28th, 2008 at 7:55 pmBut I opted to have XM put in.
Why?
Because I figured any company that would spend $500 million on Howard Stern was so fiscally unsound in their management decision-making that they would go under sooner or later so I wanted to have “the other guys.”
Personally, I don’t care about Stern. His talent- and/or vulgarity- are not the point.
He’s popular- but spending $500 Million on ANY radio talent is insane.
It’s 3 years later now and I wasn’t wrong. but, even as an XM subscriber, I STILL got stuck with Sirius.
Hey nobody knows for sure the future. This service would be nice to have. As just posted the FCC stalling while they listened to every local radio station complain that this might force them to work harder was the first blow. The second was Detroit going belly up. I might add a thousand shares of this to my ‘Hail Mary’ portfolio. Won’t cost a thing after I skip a movie. They can pay their first pile of debt and who knows a buyout? The FCC approval in itself should be worth the next two piles.
Posted by Robert Falkner at December 28th, 2008 at 9:47 pmWith all the bandwidth available (shared btwn both Sirius & XM) and consumers screaming for evermore access to mobile Internet, why hasn’t Sirus-XM carved-out some bandwidth dedicated for mobile Internet and either become a direct provider or partner with someone. I’m thinking if Apple can lower its price point on the iPhone, it’s because they know they’ll make it up on the AT&T subscribers fees for all the 3G bells & whistles. Sirius-XM better jump-in before they miss the last chance boat to profitability. My 2 cents (I own 1,ooo shares).
Posted by Mark Orr at December 28th, 2008 at 9:58 pmYeah like the printer then the ink, or the flat screen tv and then the mounting bracket..great ways for them to make money before you’re done. If I were good at guessing I’d say mobile everything is what we want next when we climb into the cockpit of our vehicles.
Posted by Robert Falkner at December 29th, 2008 at 12:01 am$500M for Stern is crazy! Now if it were Limbaugh…Well why not? He saved AM radio
Posted by David Siburkis at December 29th, 2008 at 2:57 am