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Technology Stocks : Sirius Satellite Radio (SIRI) -- Ignore unavailable to you. Want to Upgrade?

To: rrufff who wrote (967)	10/11/2004 4:44:27 PM
From: i-node	Respond to of 8420

rrufff Please don't misunderstand me. I'm not trying to convince you to make your trades based on what I say. I have been TOTALLY WRONG about SIRI's pps for a long time now -- however, I think the fundamentals of the company continue to get worse, not better. The people who are trading SIRI show no signs of letting up -- a little good news could cause the stock to pop at any time -- I fully expect their sub #s to be better than expected. But the financial statements, I think, will be the grapes of wrath. One thing is that XM has already been through this, earlier this year -- knocking the top out of expectations, but continuing increasing losses. This is a natural by-product of the way the accounting is done -- in effect, expensing SACs early and recognizing revenue as earned. SIRI still has to "pay some dues" in this regard. If Stern brings in 4M or 5M subs, it is a winner, long-term; I just think it is unlikely to do so well. One of the more interesting remarks today came from Bank of America -- which was very positive on XM but suggested that breakeven on the Stern deal was more like 1.9M subscribers. Anyway, they made this remark: 3. What Does the Stern Deal Mean for XM?: Clearly more competitive - but technology lead & stronger OEM partners should give XM some leverage with other talent (i.e., Rush) or desired programming (MLB), as we expect SIRI to act more cash conscious the next time a big opportunity arises. My immediate thought was, "Hell, they haven't been following these guys long enough yet. There is a long established history of overpaying for deals: a) How many here even REMEMBER the $2 million cash giveaway? Frankly, few people ever knew it happened. b) The Pamela Anderson Carwash? c) The Penske Deal, which is of marginal value to date. d) The Radio Shack deal, which is producing very few subscribers to date (in spite of receiving a revenue share from SIRI). e) The NFL deal, on which the jury is out, but certainly their biggest winner to date -- yet, a deal which it is nearly inconceivable they can break even on. f) Now, Stern. g) They're going to HAVE to come up with money to get Ford to come onboard. Ford isn't about to take less than DCX got. I have no doubt there will be major excitement when Ford commits, but the cost will drag the pps back down IMO. The one remaining "biggie" that could really make a long-term difference for SIRI is Toyota. If, somehow, they could wrestle Toyota away from XM, even part of it, I think that would truly be considered a win for Sirius. Please keep in mind. I'm the same guy who said you ought to dump your SIRI at 2.10 a couple months ago and buy XM stock. I still think that was a sensible view, but clearly, had you done so, you would not have been happy with me today.