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XM Satellite Radio's stock tanks 60% this year !

S

SayNoToIBOC

Guest
So David,

What were you saying, over on rec.radio.shortwave, about those 11,000,000 satellite radio subscribers - oh, I guess they needed the expected/predicted 40,000,000:

http://www.rwonline.com/dailynews/index.php

Sirius and iBiquity/HD/IBOC will be right on XM's tail...
 
SayNoToIBOC said:
So David,

What were you saying, over on rec.radio.shortwave, about those 11,000,000 satellite radio subscribers - oh, I guess they needed the expected/predicted 40,000,000:
Click to expand...

I said that satellit had hit a "brick wall" as investors realize that the early sadopters and trend setters have already bought, and the value seekers (next set in marketing) are not buying.

I said that at the current level, they represent about a 0.4 share of radio listening nationally, and are not significant and have not hurt terrestrial radio.
 
No David, you are spinning it again - here is the post:

On Thu, 27 Jul 2006 14:37:15 GMT, "Frank Dresser"

<[email protected]> wrote:
>If there were a strong demand for digital radio, people would have bought
>the digital radios regardless of whatever band digital was on.
>If digital has to be nursed along as if it were a sickly puppy, it suggests
>a weak demand.
>It's concevable there's absolutely no demand at all.

AND HERE IS YOUR REPLY, DAVID:

Sirius and XM have acquired 11,000,000 subscribers in less than 5 years.
 
Shares in XM Satellite Radio (XMSR - commentary - Cramer's Take) surged 6% Thursday after earlier hitting a three-year low.

The reversal came after the struggling satellite radio company cut its subscriber growth forecast for the second time this year.

XM shares opened sharply lower, down 7% at $9.63, but they then recovered to trade up 64 cents at $11.

The Washington, D.C., pay radio shop says it now has more than 7 million users. But citing increased competition and radio troubles, XM cut its year-end subscriber target to about 8 million. XM started the year with a goal of hitting the 9 million user mark. But in May, as rival Sirius (SIRI - commentary - Cramer's Take) started to gain market share, the company cut its year-end estimate to 8.5 million users.

Though it now is counting on signing up a million fewer paying customers by year-end, XM says it still expects to turn cash-flow positive in 2006. But the company admits that may not be easy. Reaching cash flow positive "becomes challenging toward the lower end of the subscriber range," the company said in a press release Thursday.

For the second quarter, XM posted a net loss of $229 million, or 87 cents a share, on sales of $228 million. Those numbers compare with a net loss of $147 million, or 70 cents a share, on revenue of $125 million in the year-ago quarter.

Excluding $105 million in special charges and debt payback, XM's second quarter pro forma loss was $46 million. That number compares with a $88 million adjusted loss in the year-ago quarter.

XM's costs to acquire customers grew from year-ago levels. The subscriber acquisition cost, or SAC, in the second quarter was $64 per acquired subscriber, compared with $50 a year ago. And the cost per gross addition, or CPGA, was $112 in the second quarter, higher than the $98 level a year ago.

The customer defection rate also increased at XM in the second quarter. The termination or monthly churn rate in the second quarter was 1.8%, compared with 1.4% in the year-ago period.

Sirius has taken the lead on the two-player satellite radio subscriber growth race this year, largely because of the debut of the Howard Stern show. XM's net new subscriber additions in the second quarter totaled 398,012, giving the company a total of 6,899,871 subscribers.

As Sirius announced earlier this month, the New York broadcaster added 600,460 net new users, pushing its subscriber roll to 4.7 million. The company has said its year-end target is 6.2 million users.

Sirius is due to post quarterly results Tuesday morning.

Sirius rose 7 cents Thursday to $4.03.

From the street.com
 
Hey Friend,

That is all a mute point - satellite radio was expecting 40,000,000 subscribers by now, and they only have 11,000,000. Do you think there are going to be any investors, after XM's stock has tanked 60% this year !

http://www.rwonline.com/dailynews/index.php

And do you see these phrases, in your article:

counting on
expects to
that may not be easy
becomes challenging
 
Digital broadcasting, (XM, HD, Sirius etc.) has limited appeal to the public that is satisfied with analog AM and FM plus the huge growth markets of streaming, podcasting, iPodding, MP3's, cellcasting, etc.
 
SayNoToIBOC said:
That is all a mute point - satellite radio was expecting 40,000,000 subscribers by now, and they only have 11,000,000. Do you think there are going to be any investors, after XM's stock has tanked 60% this year !
Click to expand...

Akctually, it wood be a moot point.

XM and Sirius are not far behind the forcasts made in 2001 when they were launching the services. It has been investment bankers, not the satellite companies, that projected 30 to 40 million subscribers...and that was by 2010 to 2012, not by this year. XM is very close to the original plan on subscribers, but further off on cash flow and break even points.

I went back to an initial XM document I got when we started programming some XM channels and it said 8 million by the end of 2006. They may actually make it. And it called for positive cash flow by the end of this year, which is less likely but still possible.
 
Actually David, it IS a moot point - as you said, "forcast". Yea, just like they, "forcasted", 40,000,000 million subscribers by now, and have only 11,000,000 ! Check out my new thread on the CCrane's new WI-FI Internet radio - THAT is impressive technology, NOT HD/IBOC !
 
SayNoToIBOC said:
Actually David, it IS a moot point - as you said, "forcast". Yea, just like they, "forcasted", 40,000,000 million subscribers by now, and have only 11,000,000 ! Check out my new thread on the CCrane's new WI-FI Internet radio - THAT is impressive technology, NOT HD/IBOC !
Click to expand...

XM and Sirius did NOT forecast 40 million. Investment bankers did. People on Wall Street with nothing to do with the business make guesses on what will happen to the business... and they guessed wrong.

XM is pretty much right on track with its own projections, and Sirius is ahead of them.
 
SayNoToIBOC said:
Oh David and autopaint-1,

What was that you were saying, about XM Satellite Radio ?

1) "XM Lowers Subscriber Projections Again"
2) "XM’s Net Loss Grows"
3) "XM on FM Mods, RIAA Lawsuit: We’re Working on It"

http://www.rwonline.com/dailynews/index.php
Click to expand...

I said subbscription rates were slowing, and future growth may not be as rosy as INVCESTMENT BANKERS projected. XM is very close to its early internal projections, in fact.

The XM loss consited on a large non-recurring item. Without it, it had its lowest quarterly loss ever, and actually had cash flow (EBITDA).

Most XM satels are not portables, and the RIAA thing will be resolved, just like they made an agreement with ASCAP. Every company in America has legal issues of some kind.

Satellite is nowhere near as bleak as you paint, but on the other hand, there are signs that future growth will not be a quick jump to the 40 million that investment advisors have predicted, but a more reasonable 20 million by the end of the decade. This will still mean good profits, but not enough to sustain the stock prices they peaked at...
 
Satellite radio is still 30,000,000 subscribers short, as 40,000,000 was projected. Any company's stock that has plunged 60% in one year is ominous - but remember those future forcasts ! You are running out of steam !
 
SayNoToIBOC said:
Satellite radio is still 30,000,000 subscribers short, as 40,000,000 was projected. Any company's stock that has plunged 60% in one year is ominous - but remember those future forcasts ! You are running out of steam !
Click to expand...

Niether Sirius nor XM projected 40 million. This was a guess by investment analysts who work for brokerages and investment houses, not for Sirius and XM. The stock prices ran up on the projections of the analysits, not the more reasonable and meetable projections of Sirius and XM themselves.

When you say "was projected" you have to take into account that the two providers did not do those projections; outsiders did! This is like blaming the coach of an NFL team who projected a losing season due to the loss of some key players when a sports writer says they are going to have a winning season due to the "new blood."

Just as the sports writers are NOT the team, the analysts are not in any way connected to Sirius and XM.
 
Well, it looks like the analysts were correct - both companies are heavily in debt and XM stock has plunged.
 
SayNoToIBOC said:
Well, it looks like the analysts were correct - both companies are heavily in debt and XM stock has plunged.
Click to expand...

The analysts were wrong. They said that the 1012 to 1014 projection was for 40 million, and this is not happening.

XM and Sirius performances have been very close to their actual projections, while the investment analysts have been consistently wrong, and when reality hit, the XM stock, pumped up by "strong buy" and "buy" and "accumulate" ratings has gone down as there is no matching performance.

Again, the analysts tried to outguess the industry. They were wrong. The XM estimates have been very accurate.
 
That was called sarcasm ! Well David, if you want to put your money in a company whose stock has plunged 60%, go ahead ! The point is, analysts projected that satellite radio would need 40,000,000 subscribers, to stay profitable, and they only have 11,000,000... Wonder, why both companies are heavily in debt...


From RWOnline.com:

"What do you do with a stock that tanks 60% in a half year ?"

http://rwonline.com/dailynews/one.php?id=9434
 
SayNoToIBOC said:
That was called sarcasm ! Well David, if you want to put your money in a company whose stock has plunged 60%, go ahead ! The point is, analysts projected that satellite radio would need 40,000,000 subscribers, to stay profitable, and they only have 11,000,000... Wonder, why both companies are heavily in debt...
Click to expand...

You have not gotton one thing right about the whole XM, Sirius and satellite thing.

Analysts prdicted that by 2010 to 2012 that there would be as many as 40 million subscribers. They obviously used a model based on a projection of early growth, not recognizing that once early adopters and trendsetters were saturated, growth would be slower.

XM and Sirius both can be profitable at between 8 and 10 million subscribers each. 40 million is pie in the sky.

XM had cash flow this quarter, were it not for the non-recurring item. It will have positive EBITDA in the 6 to 9 month period. Neither company needs 20 million subscribers each to be profitable. They need about half that.

Both Sirius and XM have modest debt. In fact, as I have said twice now, the debt to equity ratio of each is lower than that of General Electric! Most of the initial losses and the start up capital for each have been provided by equity offerings.

There is no massive debt. There is no need for 40 million subscribers to be profitable. And at the current price, XM is probably a "buy."
 
SayNoToIBOC said:
XM traded debt securities for preferred stock, that doesn't mean a thing.

XM debt:

http://www.pcmike.com/2006/07/has_the_satelli.html
http://www.centredaily.com/mld/centredaily/business/technology/15135564.htm

Sirius stock alert: risk high 7/28/2006

http://today.reuters.com/stocks/overview.aspx?symbol=SIRI.O

AND, look at the trend since January !

Looks like YOU got a few things wrong, too !
Click to expand...

I did not get anything wrong. You just understand the markets less than you understasnd radio, which is pretty incredible.

Preferred stock is closer to bonds than stock. It is guaranteed dividends, that is all. And is convertable to common.usually.

Almost all of Sirius´and XM's working capital since the start has been financed with equity issues. Almost always have a shelf authorization available to issue more stock to pay the ongoing losses till they are profitable. Procedure: Board authorizez more shares and the dilution of equity of current shareholders. Shares are sold at market, proceeds used to provide working capital.

Almost all hi-tech stocks are higer risk. Morningstar rates XM, google and Yahoo all as speculative, as they are tech stocks at a time when most tech stocks are high risk. That said, XM went up 17% today! It is rated a buy by a bunch of analysts, as they feel the market overcompensated on the downside.

Again, the debt to equity ratio on the XM balance sheet is better than the one on General Electric's. GE is considered perhaps the finest company in the USA... meaning it has a reasonable debt to equity ratio. XM has finaced almost entirely through equity offerings, not debt. YThis is why a 5% share of XM in 1991 is now less than a 1% share.

Advice: buy a nice safe indexed broad market exposure mutual fund. You don't know what you are talking about regarding debt, equity, investments or the markets.
 
Wait a minute - what was I thinking !!!

As direct competitors, we don't want Satellite Radio to fail, we want HD Radio to fail !

"For Digital Radio to Compete With Satellite, It Needs to Think Outside the Jukebox"

http://www.washingtonpost.com/wp-dyn/content/article/2006/03/31/AR2006033100349.html

Thanks David, you made me feel better !

David wrote: "I did not get anything wrong. You just understand the markets less than you understasnd radio, which is pretty incredible."

Gosh David, you are a Univision executive and talk-down, to others like that ? I am just a lowly senior software engineer with a high-level Intelligence Community security clearance (don't panic that I told you that, because NSA sells NSA logo hats and tee and sweat shirts to its employees/contractors).
 
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