More News Is Bad News

Every time I read something about Sirius XM Radio it is negative.

That is kind of fitting in an ironic way because last night I typed SIRI into the search box on the top of this page and confirmed that everything I have written on the company has been negative.

With the stock at $0.20 and the 10Q delayed, there is obviously more trouble ahead.

If the chatter around this week is true, the crown jewel, that it's a great product that people love, is being jeopardized by the merger of the two networks. The following headline from Ars Technica, "Sirius, XM subscribers revolt over merger-induced changes" may be all you need to know.

Getting Sirius

Now that the XM/Sirius merger is complete, CEO Mel Karmazin has big plans.

The NY Post quotes Karmazin :

"We're going to be the most successful company in radio," Karmazin said in an interview with The Post. "We're going to be bigger than Clear Channel because we're growing and they're going the other way."

Sure they're growing, but while they have clearly laid out the next round of cost savings, but they're nowhere near profitable and it's not clear to me how they're going to finance the continued operation.

Or the wild card. If you really had designs on being the largest radio operator, wouldn't you be looking at an acquisition of a traditional radio property? The problem is that with the common at $1.30, there's not a lot of currency there, and the balance sheet needs less debt, not more.

I think it's more likely that another media outlet buys them.

Ends and Odds

Even with oil having gone from $148 to $118, it is not going to be easy for this market to work if oil is going down because the economy is getting worse. It's a positive that consumption is down, though.

Boy oh boy I wouldn't want to be the new CEO of Motorola.

Sirius CEO Mel Karmazin yesterday walked on hot coals, put is head in a lion's mouth and then bought some of his company's stock.

"Someone" has now "broken" the story of "Lehman considering selling Neuberger" about 50 times.

I can't imagine the Fed doing anything this afternoon. I bet they are as confused as we all are.

Mel Karmazin

CEO of Sirius has got to be kidding.

He's on CNBC now and is totally full of baloney.

2009 free cash flow positive? We'll see.

SIRI/XMSR

At the risk of sounding like I'm doing an end zone dance, Sirius and XM got drawn and quartered today as they announced that they would indeed raise more money, as I speculated Saturday.

It's a good product and concept (both) but their balance sheets have some issues.

A Little Prediction

The FCC et al approved the Sirius/XM merger yesterday.

I think the combined entity will raise some cash then go to zero. The common, that is.

By the way, one of my best friends in the whole world owns some terrestrial radio properties in Canada and he predicted this (not the merger, the busto eventuality) about 10 years ago.

I didn't get much sleep last night so I could be wrong.