>>> My argument was based on what CPGA was a couple years ago
Exactly, which is meaningless, since those CPGA figures are not representative of current numbers.
>>> Ahh! Now you are the one being "disingenuous" here. Now you are claiming that this is no longer the case based on WHAT YOUR PROJECTIONS ARE FOR NEXT QUARTER.
Not at all. XM's CPGA for the several quarters:
q2'04 101.00
q3'04 89.00
y'04 100.00
q2'05 90.00
q3'05 98.00
Now, in Q4'05, XM's CPGA moved back up into the $110+ area, but they clearly stated that it has already dropped back to previous levels and that the Q4 numbers were aberrations due to the one-quarter "Stern Effect". Xm's management has been very consistent in delivering good numbers for CPGA. To get to a CPGA of $180 you'd have to go back to Q4'02 -- not once since then has CPGA been anywhere near that level.
So, it is disingenuous to suggest that this is typical -- XM was very early in its startup phase at that point, being open for business only 1 year.
>>> Weren't you the one claiming UFCF by the end of 2004, then mid 2005, end of 2005??
The MLB deal did cause them to delay CFBE ... which they have reiterated for this year. But it is, at this point, an unimportant metric. As I just pointed out on another thread, as an example, Sirius lost $863 million in '05 with a cash burn of only $275 million. It is meaningful only if you're concerned about having enough cash to get there. Both these companies are fully funded at this point, unless something really screws up.
>>> You projected CFBE in 2004.
It is a fact that XM entered into a long term contract with MLB, which was necessary to maintain the upper hand with respect to sports content. Yes, it delayed CFBE -- but it was a great content acquisition and it was forced by the wild spending of an incompetent competitor. Tough. It had to be done. But it doesn't, in any way, fundamentally alter the facts.
And for that matter, it doesn't alter the cost structure AT ALL. MLB was always coming -- but SIRI's signing of NFL forced XM to move forward with this before they would otherwise have done. I think they made a good judgment and responded properly to the competitive situation.
>> Others appear to be following his viewpoint.
Who? There were a dozen other directors who disagree with him. Had a couple more walked, it would be something.
XM has been extremely conservative in its spending and I'm sure that won't change. However, his "leaving over the '07 budget" leaves a lot unexplained -- and I would wager it has to do with substantial capex necessary to greatly expand the scope of the business. I'm good with that, provided they have as strong a business model for it as they have with sat radio.
I suspect come Tuesday morning I'll be buying more XM shares. You may want to cover your short from $9. Just kidding. |
