dcsilver (88.88)

Sirius (SIRI) to HOT to handle? And other thoughts (LTS, NVAX)

August 25, 2009 – Comments (3) | RELATED TICKERS: SIRI , LTS , NVAX

What do you do when your favorite equity becomes a burning sensation?  Do you go to the doctor and get a cream? Do you call your astrologer and thank your lucky stars you did not give up on them? Gasp – do you sell for a profit?  I have no idea.

The good news is that Sirius has gone from $.05 to $.70 in the last five months or so.  Why?  The economic tsunami did not kill them.  Does that make Sirius a good stock to hold onto? Let’s look at some fundamental issues:

Dilution and Share Value – Sirius has 3.9 billion shares outstanding and a current market cap of just shy of $3 billion dollars.  People talk about Sirius and whether or not it is a dollar stock.  Bill Parcells used to have a quote “You are what your record says you are.”  Therefore, Sirius is a $.70 stock.  

Debt – While the debt issue was prolonged, it was not solved.  Outstanding cash obligations for the next 6 months are $749,000, and $871K in 2010, $1 billion in 2011, $900K in 2012, and an often overlooked $2+ billion in 2013.

New Hardware – After watching the MASSIVE failure of the Iphone application, I’m not overly excited about the new SkyDock. 

Superior Programming – This is what is interesting to watch.  If Sirius continues to negotiate exclusive deals with superior talent, this stock will continue to be a winner.  If we watch Howard Stern leave at the end of his contract next year, followed by baseball and football, Sirius is in big trouble.  The recent signings of Rosie O’Donnell and Chris “Mad Dog” Russo are a good start, but Sirius needs to find a way to attract a younger audience to continue to grow.  My personal thought is that Sirius needs to resign Howard Stern to a development deal but force him to create a new talent to spin the show off to in the future (and no Artie Lange is not the answer – he’s a side kick for a reason).  Not an easy thing to do, but true genius does not only look at today, but tomorrow, next month, and next year.

PREVIOUS BOLD PREDICTION = $.75 by the end of September.

NEW BOLD PREDICTION – $.85 by the end of  September

Interesting tidbits –

Keep an eye on LTS.  I don’t understand the fundamentals yet but the stock is moving all over the board.  I’d love some intelligent discussion about the stock and where it’s heading.

NVAX – This stock has blockbuster potential and bankruptcy written all over it.  Put a few thousand dollars of play money into this one and you just might be rewarded.  This is a complete lottery ticket buy.