"more dilution on the horizon"
That's not fact.
It clearly IS fact. For the better part of a year now, I've been on this board and others complaining that SIRI needs more money. First, the 250M debt. Then the additional stock. Then the shelf registration for $500M. Now, they've used a bit of the shelf registration, but there is no way they're through.
What people seem to be confused about is the fact that they have $600M in cash, that this somehow says they don't have a problem. But when you're burning $80 or $100M/quarter, with no real signs of progress in increasing revenue, $600M is nothing.
Some time ago I made the statement that if SIRI didn't get to 250K subs this year it could well be '06 or '07 before they break even (for which I was roundly criticized over at RB). At the time, I really thought they could beat 250K. Surprise! They may not even come close. And I stand by my statement: If they miss 250K, it will be the end of '06, or perhaps '07, maybe later, before they break even. By such an abject failure to execute, they have destroyed their own OEM agreements and are going to have to spend a ton of money to retain the commitments of Ford and Chrysler. And I'm not even convinced THAT will do it. Ford is wanting to be protected against making a bad decision here, and SIRI is going to have pay nicely for that.
This stock, for the next few years, is dead money. Yes, someone may make some money if they can time the highs and lows, but until the shelf registration is used up they damned well better be able to time the announcements of different offerings, as well, or they will be killed by the dilution.
For the life of me, I can't see why someone would buy SIRI, a total "failure to thrive", when XMSR is really hitting perfectly on all cylinders. Go figure. |
