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Strategies & Market Trends : YEEHAW CANDIDATES -- Ignore unavailable to you. Want to Upgrade?

To: EGGSHAPE who wrote (1737)	4/20/2003 12:12:10 PM
From: Ken W	Read Replies (2) \| Respond to of 23958

Morning Ed and happy easter. SIRI's last 10k was a mess. Just a fast read here, but here are a few of the red flags I saw in the 10k. #1 thing that caught my eye was the convertible suborinates at 8.5% due in 2009. I'm assuming that this was part of their "debt restructuing" effort. I did not dig into the deal, but would bet that there is either a very low floor on the converts or none at all. This is where the dilution of the stock is coming from along with the constant short selling of the stock. #2 Costs are way up compared to revenues. A certain amount of this is due to the launch bid to get more customers from the rebate program, but to retain 7 and change for a 12 and change subsription is pretty poor. The highest cost looks to be insurance related to cover any loss of equipment out there in space land. LOL #3 They are in several markets, but appear to be looking for a niche in the more high end import type of cars. MBZ, Audi etc. (as well as an all gay channel) In a better econ. this may be a good way to go, but XMSR is dominating them in the joe six pack market..GM, Ford etc. #4 Something I definately don't like is the "repricing" of stock options. Stock options are a hot button since all the scandels recently. No one likes someone else making money off their own idea. The repricing is preceived as "we'll just lower the excercise and still sell to the unwary public at a profit, so I can have my big house in Texas" #5 Their cash burn rate to rev. ratio is way too high. Most of the cash burn is due to expenses related to operational mistakes that should have never occurred in the first place. Non essential office space expenses are a "BIG RED FLAG". (a good place to hid losses that they don't want to claim in the real world). Now, that I've ruined the rest of your day...LOL The downs ide from here is minimal and there is a better than even chance that someone like News Corp. could come along and buy them out just to get the infrastructure. Murdoc has done this kind of thing many times and turned the ugly duck into a swan. Ken