Whiskerbiscuit

Let's say Sirius doesn't merge and goes black at 10.0 million subs in 1/2008.
This is very optimistic.

Let's assume they continue to grow at net 3.5 million subs per year.
Let's assume their margins are TWICE that of Direct TV's which is 8.0 %.
..........we'll assume 16% for Sirius.
Let's assume there is a price increase of $24.00 per year, per sub.
Let's assume no sub leaves due to pricing.
Let's assume Howard and Nascar are always there.

In 1/2012 Sirius would have 24 million subs roughly.
13.00 X 12 = 156 X 24 million = 3.74 billion in sales.

Total profit @ 16% = 600 million on 3.74 Billion in sales
600 million bucks divided by 1.5 billion shares is .40 per share.

At 20 times earnings Sirius might be worth $8.00 per share in 5 years. IF everything goes swimmingly.

At 15 times $6.00 per share.
At 25 times $10.00 per share.

Don't buy/own this stock unless you anticipate a merger. Period.
A merger would produce 7-8 billion in combined savings that would better justify the investment. Otherwise, unless you have a death wish, don't buy.

Cramer is fully correct.

garypl

you forgot to take into account any stock repurchases which would happen for sure on a massive scale under your rosy assumptions--PPS would be affected

Whiskerbiscuit

------------------

With what money ?

Buy back stock and cut the earnings per share.

You can't put that money both places.

------------

The sloppy numbers I've guessed at ( better than anything I've seen in print from fancy assed analysts ) would probably be more than doubled with a merger. If you assume 3.5 B in savings ( over five years per Peck ) to the Sirius side/shares alone, that adds .45 to annual earnings or $9.00 per share with multiples, based on 1.5 B shares.

A merger adds $8.00-$10.00 to the share price of Sirius in 2012.

I keep reading posts and comments that say a merger isn't needed and simply scratch my head. It may not be needed if you want declining services and higher prices as a consumer, but it sure as hell is overdue if you are an investor and/or believe that quality programming is tied to profitability.

Satrad is still losing Billions before an onslaught of additional competition from ipod proliferation, in car computers, WIFI and HD. Not to mention the possibility of $4.00 gas.

M4

Cramer is an idiot.

I think you meant $15 x 12 = $180 x 24 mil subs = 4.320 billion in sales. Add some ad rev to that and we go even higher.

Who knows what Siri backseat will bring. There's just so much speculation, bk, merger, aapl. At this point all we see that people are willing to pay to listen to commercial free music.

I like Mel, I like Howard, if it wasn't for them 2, I prolly wouldn't be invested as much as I am in SIRI. When Mel sells, I'll sell. Until then, I'm just holding the bag.

__________________
Starmate Replay - 1999 Honda Accord EX V6
XM - 2008 Nissan Altima Coupe 3.5 SE
Sirius Premium Online Radio

Whiskerbiscuit

-------------------

Average revenue is now 11.00 per month despite the 13 you pay.
Holding the bag while all these cocksuckers overpay themselves ( while the BOD watches/collect income ..except Jack Pierce ) and talk shit is EXACTLY what happened to. Mel included. Backset included.

bmbingham

You cannot forcast future revenue without taking into account future revenue streams. Like growth in advertising on non-music channels. I believe Mel's goal for this is 10% of gross revenue. Sirius TV is coming soon.

bmbingham

ARPU is currently $11.17

And you only pay 12.95 a month if you subscribe by the month. There are discounts for 1 and 2 year subscriptions.

twluddy

First Off , Comparing Sirius with Direct TV is 100% WRONG !!!!!
Like comparing Apples with Oranges.

The Operating Costs of Direct TV are extremely high because of the
competetive structure of PAY TV . There are at least a dozen pay
TV companies who and the competition for new subscribers is cutthroat.

For example Direct TV paid:

"DIRECTV, Inc., the nation's leading digital television service provider, today announced a five-year $3.5 billion agreement with the National Football League to extend and expand DIRECTV's exclusive rights to carry NFL SUNDAY TICKET"

That is outragiously HIGH !!!! Sirus 7 year deal with the NFL cost a total
of $225 Million !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Direct TV 's SAC to acquire new customers is $650 per sub. Sirius is about
$100 per Sub.

That is why DIRECT TV profit margin is only 8%

Sirius Management states that 70% of new subscriber revenues go right to
the bottom line. Analyst's agree.

In fact Stifel's analyis shows Sirius Operating costs only increasing by a
TOTAL OF 5% from 1/2007 to 12/2010. WITH REVENUES INCREASING BY
OVER 200%.

The margin of 16% your showing --- Stifel SAYS 30% !!!!!!!!!!!!!!!!! by 2010.

Sirius is STATING Free cash flow of 3.0 BILLION by 2010.

YOUR PROFIT numbers are grossly understated !!!!!!!!!!!!!!

Whiskerbiscuit

-------

While your post fails to mention that DTV or DISH's revenue per customer is four-five times that of satrad, ( which puts their costs into perspective ) I don't take issue with some of the facts you state except to say the 70% Sirius numbers are referring to is surely gross profits.

Also Stifel stating 30% in 2010 may also be after only a 10% net from 2008-2009. To that point, even if I'm wrong and it's 22%, it's still a terrible investment in 2007....without discounting the risk. IMHO.