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

To: Selectric II who wrote (1092)	11/20/2004 6:30:55 AM
From: rrufff	Read Replies (1) \| Respond to of 8420

Your is probably the best and most objective post here I've read. On the one hand, we have an XMSR tout and a few followers. The tout is so in love with hyped XMSR that he needs to attack SIRI because it is more highly leveraged. That's why he spams this board with the same long-winded blather over and over. On the other hand, making money is timing and SIRI has been the place to be since Stern announced. The XMSR tout has been wrong and has been bitter. Long term both are extreme gambles. There is no reason to buy XMSR now. SIRI is a gambler's shot, because of Stern and Karmazin. One can make money on gambling, but they have to understand exactly what it is. The XMSR tout thinks he's investing.

To: Selectric II who wrote (1092)	11/20/2004 11:58:23 AM
From: i-node	Read Replies (1) \| Respond to of 8420

>> No offense, but all this chatter reminds me of the Iridium vs Globalstar satellite telephone hype of a few short years ago. I understand the comparison. >> why should anybody buy either one of them? Both of these companies are going to make money. There is some question about whether the current shareholders of SIRI will ever see any of it. Essentially, Sirius has bet the farm on Howard Stern. If Stern can bring 1.5 or 2.0 mln subscribers, they'll be fine -- although, they're burning $100 mln/quarter right now and will continue to do so for some time. Sirius could hit cash flow breakeven in late '07 or early '08. XM is no longer the high-risk speculation it was a year or two ago. With the addition of $400 mln last week at EXTREMELY favorable terms (essentially, 1.75% interest until it is converted to 8 mln shares in '09), they have $800 mln cash. Operations are burning $15 mln/quarter (although this will increase with the addition of MLB). They will hit CFBE in early '06, even considering the addition of MLB. Before taking a position in either company, I would urge you to study each company's financial statements. Comprehend that Sirius has about 1.7 bln fully diluted shares while XM has, after last week, about 316 mln fully diluted shares. Notice that XM's SACs are at $57 while SIRI's are over $200. XM's OEM deal with GM is expensive, but has proven to be worth it. XM's management has been superb since its inception, which is why it has been the better investment long-term: finance.yahoo.com Sirius has tended to run on hype, and you'll notice that it typically gives back these fast-pop gains like the one it has seen lately. Yes, it is trending up, but the swings are huge -- this is simply due to unsystematic risk in the stock: finance.yahoo.com I've been wrong about SIRI's pps movements many times. I've been wrong not because of SIRI's excellent performance, but because of the herd mentality associated with the stock. It runs up on hype, then gives it back when the hype dies down. You can make money in that environment if you can time it. When you see people posting here and other places who have made huge gains in SIRI, this is what they're talking about. The company posted its biggest loss to date ($169 mln) in Q3, and frankly, that figure will be HIGHER for Q4. This year alone, SIRI added $130 mln/year in fixed cost burden in a desperate effort to get subscribers. We'll see whether it works -- it may, and we have new management, which is big. Meanwhile, XM just keeps on performing. It posted its best quarter (still a $118 mln loss) in Q3, and I estimate will lose about $110 mln in Q4. XM's loss will drop in Q1'05 to about $90 mln, which puts it near cash flow breakeven but for the MLB payment due. No hype, just execution. Consider this: For two years Sirius has shown "back seat video" at CES which attracted a lot of attention (even though they aren't able to deliver on it at this time), when it MUST know there is no business model for it. XM can deliver the same content, but is miles ahead on the technology (check out DigitalFountain.com). Yet, they've clearly stated, "We don't think that business model is ripe just yet". No hype. The bottom line: If you play wild swings for profits, Sirius is a good play. If you want a solid, 3-5 year growth stock, XMSR is the better play. IMO. I do plan to buy a little SIRI when it gets back to the low 3s, which I would never have done with Clayton running the company. But MelK brings credibility to management, and management has been my complaint all along. It is significant to note that over 90% of XM's shares are in the hands of institutions and big investors. The other 10% just doesn't get the attention that Sirius' 1.3 bln share float gets. Sirius is "cheap" at $5/share vs. XM's $35, and Sirius is daily in the most actives (duh -- daytrading massive numbers of cheap shares). As an XM shareholder, it has often been frustrating to see Sirius get all the attention even though XM is out-executing Sirius in every respect. But in the end, XM keeps on plugging. Long-term, you won't go wrong with XM -- XM will be at $100 a couple years down the road. And I don't THINK you will with SIRI; but SIRI has some major financial problems ahead of it and is counting solely on Howard Stern to bail them out. If Howard fails to do it, there is no "plan B". This is all IMO. I obviously would not recommend anyone buy either stock without a careful reading of the 10Q/10K and a hard look at the financial statements.