XM vs Sirius (A friends' arguement...you decide)

[XRobEvansX@gmail.com]

(THIS RANT/POST IS SOMEWHAT, IN MY OPINION, FUNNY- SO READ AT YOUR OWN
RISK, BUT I TRULY WANT YOUR OPINIONS. PLEASE READ THE LINKS SO YOU CAN
GET A FEEL FOR OUR ARGUMENTS)

My friend and I have been arguing since Stern left for Sirius which sat
service was better. Since then it *seems* XM has been taking a punding
financially, and my buddy takes Jim Cramer's opinion as gospel. I just
don't see why XM is so bad.

1st it was "takeover" talk. He provided a link:
http://biz.yahoo.com/cnnm/060726/072606_mediabiz.html?.v=3

Then I responded with a link of my own:
http://gizmodo.com/gadgets/portable-media/sirius-xm-merger-fo-real-nah-not-really-183463.php


Then we got heated about the worth of the companies (mind you, he is a
Financial Advisor. I am a Marketing Director) He swore he is "up
$2.00":
My email to him:
****************************
If you are up $2.00 a share, and it is at @4.00 a share now, your
average price per share was $2.00. I looked at their chart and the
only time it was at $2.00 was well before you bought it. Or you made
$2.00 a share and sold it, which makes you NOT a a share holder.

Also if you look at their statements, XM is a much better position
than Sirius. Less debt, less outstanding shares, etc

http://www.marketwatch.com/tools/quotes/profile.asp?siteid=google&symb=siri&x=0&y=0
http://www.marketwatch.com/tools/quotes/profile.asp?siteid=google&symb=xmsr&x=0&y=0

All numbers indicate XM is actually stronger than Sirius. As long as
we're clear on this.
However, even Forbes is unclear.

http://www.forbes.com/markets/2006/08/02/sirius-0802markets02.html
******************

This got him angry. Here is his response:

******************
Rob,

Please stick to what your good at... criticizing EVERYTHING our
President
has done since he's been in office while offering absolutely nothing in
the
way of a solution or alternative. Don't feel bad though, b/c your
fellow
Democrates are guilty of the same thing and it cost them the last
election
that should have been a cake-walk.

Your topic was "maybe I'm missing something"... well you are (amongst
other
subjects). For one, I've been buying/selling sirius on
strength/weakness and
I'm up about two points overall and I'm CURRENTLY a shareholder.
Second,
please stop trying to be an analyst b/c you're not... those statements
(although important) tell where a company has been & NOT where a
company is
going. And as it stands now, sirius' current performance and forcasts
are
stronger than XM's. They also have a market cap almost double that of
XM,
and whether you want to believe it or not, have the ability to purchase
XM
(from a monetary standpoint).

Finally, your "Forbes being unclear" thing once again exemplifies my
point
that you simply find information that seems to fit your agenda without
really considering/examining the source. That wasn't Forbes' opinion
you
idiot- it was ONE analyst's opinion not even employed by Forbes!

I'm telling you how it is right now. Things may swing back in XM's
favor at
some point, but it doesn't look like it'll happen in the near-term.
Regardless of which company ends up w/ a higher stock price... your
gonna
wish you had gotten sirius like me and it's gonna end up just like your
lawnmower!

XOXO,
(NAME REMOVED)

PS Your doing a lot of homework for someone who doesn't care about
this?
PSS This is an excerpt from a different analyst:

"Satellite radio remains a promising growth industry. Just days after
rival
XM Satellite Radio (Nasdaq: XMSR) lowered its year-end forecast for the
second time in 2006, Sirius (Nasdaq: SIRI) came through this morning
with a
second hike in its full-year outlook. Sirius is now looking to close
out the
year with at least 6.3 million subscribers.

The changing of the guard is starting to feel less than temporary these
days. XM may have more subscribers than Sirius -- 7 million to 4.7
million -- but Sirius has landed more net new subscribers than its
larger
competitor in each of the last three quarters. The market has already
discounted the transition. With a whopping 1.4 billion diluted shares
outstanding, Sirius commands a $5.9 billion market cap, nearly double
XM's
current $3.1 billion market cap. Factoring in debt levels to arrive at
enterprise values, or accounting for outstanding options, tweaks the
sums --
but the disparity is still wide."
********************

Now I had to respond to this:

********************
I admit I am not a professional like you, but the numbers I found
(that didn't take a whole lot of "homework" and I am not trying to be
an analyst, however it doesn't seem that hard, look at some of the
people doing it...anyone can read Morningstar) just make sense to me,
the commoner....I beg your almighty forgiveness, but the numbers speak
for themselves. Your own article states:
"With a whopping 1.4 billion diluted shares
outstanding, Sirius commands a $5.9 billion market cap, nearly double
XM's
current $3.1 billion market cap."

Imagine if XM diluted it's shares to the point Sirius has. XM only has
like 258.4 million shares out. Sirius has 1.4 BILLION. If XM
quadrupled their shares out, their market cap would be 6 billion or
better too. And they would still have 400 million shares less out than
Sirius.

I mean, I am not a financial wizard like you, but even my puny brain
can look at the most obvious figures and see that while they are
neither looking great, XM looks a *little* better.

If you could explain the mystical work of high finance (at least
between these two companies) I'd be forever in your debt. You can
even refer me to a website that will show me why Sirius is in such a
better position than XM. I will read it. I need your help.

Help me Obi-wan-Kanobi, you're my only hope.

Love, hugs and kisses, BFF, TLA
Rob

***********************
Nice, right? I had to add a BTW:

***********************
XM's market cap is like $3 bil, Sirius has about$ 800 million cash.
How can they buy XM? If you say they can buy with stock, I doubt
it....the stock is essentially worthless and they would be so diluted
the company wouldn't be worth ----.

Also I didn't mean that "Forbes" the organization wrote that
article...you are being an idiot. I am quoting a decent source
(Forbes Inc.) for an article.

I don't know much..... but I know I love you....and that some
financial concepts are not out my grasp. Please show me the info that
makes Sirius the winner here. I have no gain here either way...I just
like arguing with you.

OH- and I misunderstood you about that 2 point thing. I thought you
said you were up 2 points per share....my bad. If that were in fact
the case wouldn't I have been right in my previous assumptions about
your position with Sirius?

Love always,
rob
*********************

Of course he responded with:

*********************
Rob,

I'm not claiming to be the next Warren Buffet. What I am telling you is
that, despite your confidence in the this field and apparent
"resourcefulness", this isn't a subject you should be going toe-to-toe
with
me on.

I don't have time to explain just how bad your argument is b/c I
honestly
wouldn't know where to start. I'll give you one hint though... don't
use one
company's market cap against another company's cash to determine if a
takeover if feasible. But why am I telling you that for... you can
always go
to morningstar right??

"XM's market cap is like $3 bil, Sirius has about$ 800 million cash.
How can they buy XM? If you say they can buy with stock, I doubt
it....the stock is essentially worthless and they would be so diluted
the company wouldn't be worth ----."

Not sure if you've heard a guy named Jim Cramer on CNBC. He has this
silly
little financial show that happens to be the most watched in the
country
(among other credentials). Anywho... I came across this very topic he
covered on his show.

Sirius couldn't buy XM? Like I said, please go back to those things
your
good at(you remember, the one's I covered in my last email).


http://www.thestreet.com/_yahoo/funds/realmoneyradiowrap/10300855.html?cm_ve
n=YAHOO&cm_cat=FREE&cm_ite=NA

************************

I can't stand Jim Cramer. So I wrote back:

************************

This is the basis of your argument?:


**Cramer said that if he could talk to one CEO right now, it would
be Sirius Satellite Radio's (SIRI - commentary - Cramer's Take) Mel
Karmazin.

"It's time for Sirius Satellite to make a bid for XM Satellite Radio
(XMSR - commentary - Cramer's Take), he said.

The two companies are paying too much money competing against one
another, and Cramer believes that merging the two would allow Sirius
to raise its prices, dictate its auto prices and get into retail with
a vengeance.

In addition, he said Sirius Satellite should move now, before XM
Satellite becomes stronger and gets competitive again. If they go
through with the merger right now, Cramer predicted that Sirius will
go from $4 to $8, he said. "**


OK....I was hoping for a more analytical explanation as to WHY Sirius
could be able to buy XM (beyond why I thought they couldn't, which
seemed reasonable enough), but if you say it's because Jim Cramer says
he thinks they should...so be it.

You seem so upset about this. I am not angry about it. Can you please
just give me some real information? If it's so obvious you should
have no trouble showing me. Believe me, I'm not dumb...I can keep up.

You haven't really said much except "because I said so" which for some
may be fine, but it's no substitute for facts which I want. Prove me
wrong. Again- I have no interest in either company. I couldn't care
less which was is a "better" stock or company. I just don't see how
Sirius is up on XM. If the names were reversed and I saw the numbers
as they are, I would be saying Sirius is on top.

So...show me some reasons....honestly...teach me. And let go of the
anger. It's very unbecoming.

************************

I either broke him down, or he just was tired of arguing because
hisnext response was a quote from a Mad Max movie:

************************

Just walk away, and we can end all of this... just walk away.

************************

To which I responded:
**********************

I love you

**********************

JUST to make him even more uncomfortable and I had the last word.

As far as I can tell I am right, right? I mean, what makes Serius so
much better off than XM? I am a novice investor but I can read numbers.
Am I completely off base?

I know you guys are going to probably lean one direction, but I would
like outside opinions on all aspects of this battle including financial
opinions.

TIA

[Lowdown in Lodi]

I thought you did a pretty good job -- certainly, your friend is making a
very convincing argument.

The points that are simply irrefutable are --

- XM has better OEM deals than Sirius, including factory install exclusives
with Nissan and Toyota starting next year, as well as Honda, Hyundai, GM and
others.

- XM has far better technology than Sirius.

- Related to the point above, XM has made better engineering choices than
Sirius, NOTABLY the choice of codec, which allows XM to deliver 30% more
content at the same or better sound quality. This is an advantage XM will
have beyond the forseeable future.

- XM is spending less than half what Sirius is to add a subscriber. This is
a big deal.

- XM doesn't have the burden of Howard Stern consuming all its content
budget.

- There are so many reasons Sirius can't acquire XM it isn't even funny.
But your argument is a good one -- they would have to double their
outstanding share count, plus some -- which would destroy the share price
for a long time to come. Not going to happen. Even if the substantial
regulatory hurdles could be cleared (they can't; Cramer's an idiot).

- XM will lose half what Sirius does in '06. Sirius has lost more money
than XM throughout its existence, to the tune of a billion and a half
(before this years self-destruction).

- Sirius has definitely received a lot of press and name recognition this
year -- you would expect that from their having hired the second highest
paid entertainer in the world. Does it have staying power?

- XM ADDED MORE GROSS SUBSCRIBERS THAN SIRIUS DID IN Q2. But because they
HAVE more subscribers they LOSE more to churn. And XM doesn't count unsold
vehicles on dealer lots whereas Sirius does. And Sirius OEM subscribers get
a year with the purchase of the vehicle, so no matter what they do, they
can't churn the first year (in some cases, three years). XM makes them
start paying after 3 months.

It is really hard to make the case that Sirius is a better bet financially
than XM. There are at least 50 more good reasons why this is so.

[Rich]

Lowdown in Lodi wrote:
> I thought you did a pretty good job -- certainly, your friend is making a
> very convincing argument.
>
> The points that are simply irrefutable are --
>
> - XM has better OEM deals than Sirius, including factory install exclusives
> with Nissan and Toyota starting next year, as well as Honda, Hyundai, GM and
> others.
>
> - XM has far better technology than Sirius.
>
> - Related to the point above, XM has made better engineering choices than
> Sirius, NOTABLY the choice of codec, which allows XM to deliver 30% more
> content at the same or better sound quality. This is an advantage XM will
> have beyond the forseeable future.
>
> - XM is spending less than half what Sirius is to add a subscriber. This is
> a big deal.
>
> - XM doesn't have the burden of Howard Stern consuming all its content
> budget.
>
> - There are so many reasons Sirius can't acquire XM it isn't even funny.
> But your argument is a good one -- they would have to double their
> outstanding share count, plus some -- which would destroy the share price
> for a long time to come. Not going to happen. Even if the substantial
> regulatory hurdles could be cleared (they can't; Cramer's an idiot).
>
> - XM will lose half what Sirius does in '06. Sirius has lost more money
> than XM throughout its existence, to the tune of a billion and a half
> (before this years self-destruction).
>
> - Sirius has definitely received a lot of press and name recognition this
> year -- you would expect that from their having hired the second highest
> paid entertainer in the world. Does it have staying power?
>
> - XM ADDED MORE GROSS SUBSCRIBERS THAN SIRIUS DID IN Q2. But because they
> HAVE more subscribers they LOSE more to churn. And XM doesn't count unsold
> vehicles on dealer lots whereas Sirius does. And Sirius OEM subscribers get
> a year with the purchase of the vehicle, so no matter what they do, they
> can't churn the first year (in some cases, three years). XM makes them
> start paying after 3 months.
>
> It is really hard to make the case that Sirius is a better bet financially
> than XM. There are at least 50 more good reasons why this is so.


Sirius has the best content and more advanced technology and radios in
the stores.

[Lowdown in Lodi]

>
> Sirius has the best content and more advanced technology and radios in
> the stores.
>

Best content? Funny.

More advanced technology? You can't possibly believe this. Why do you
think Nissan and Toyota entered into factory install exclusives with XM? It
was because XM could deliver technology Sirius is unable to touch. XM is
years ahead and Sirius doesn't seem to be catching up. Even 2 years after
XM announces its first wearable device, Sirius finally announces one and it
is nearly as big as XM's Generation 1 device, with less battery life. The
remark is absurd.

Besides, as I have pointed out, no amount of "technology" will allow Sirius
to recover from (a) its choice of a severely inferior codec, a problem which
cannot be corrected in the forseeable future, and (b) its choice of an
inferior satellite configuration, something they are trying to correct over
the next several years.

Radios in the stores? Now THAT *IS* funny. You'd better have another look:

http://tinyurl.com/nnl79

[Rich]

Lowdown in Lodi wrote:
> >
> > Sirius has the best content and more advanced technology and radios in
> > the stores.
> >
>
> Best content? Funny.
>
> More advanced technology? You can't possibly believe this. Why do you
> think Nissan and Toyota entered into factory install exclusives with XM? It
> was because XM could deliver technology Sirius is unable to touch. XM is
> years ahead and Sirius doesn't seem to be catching up. Even 2 years after
> XM announces its first wearable device, Sirius finally announces one and it
> is nearly as big as XM's Generation 1 device, with less battery life. The
> remark is absurd.
>
> Besides, as I have pointed out, no amount of "technology" will allow Sirius
> to recover from (a) its choice of a severely inferior codec, a problem which
> cannot be corrected in the forseeable future, and (b) its choice of an
> inferior satellite configuration, something they are trying to correct over
> the next several years.
>
> Radios in the stores? Now THAT *IS* funny. You'd better have another look:
>
> http://tinyurl.com/nnl79


Why is Sirius in 60% of the satellite radio equipped Toyotas and
Nissans? Why is Sirius owned by 73% of all satrad Canadians? Why has
Sirius ass kicked XM in subscriber additions for a year now? Could it
be that Content is King?

[BaJoRi]

"Rich" <sirius.rich@gmail.com> wrote in message
news:1155967100.420034.244330@p79g2000cwp.googlegroups.com...
>
> Lowdown in Lodi wrote:
>> >
>> > Sirius has the best content and more advanced technology and radios in
>> > the stores.
>> >
>>
>> Best content? Funny.
>>
>> More advanced technology? You can't possibly believe this. Why do you
>> think Nissan and Toyota entered into factory install exclusives with XM?
>> It
>> was because XM could deliver technology Sirius is unable to touch. XM is
>> years ahead and Sirius doesn't seem to be catching up. Even 2 years
>> after
>> XM announces its first wearable device, Sirius finally announces one and
>> it
>> is nearly as big as XM's Generation 1 device, with less battery life.
>> The
>> remark is absurd.
>>
>> Besides, as I have pointed out, no amount of "technology" will allow
>> Sirius
>> to recover from (a) its choice of a severely inferior codec, a problem
>> which
>> cannot be corrected in the forseeable future, and (b) its choice of an
>> inferior satellite configuration, something they are trying to correct
>> over
>> the next several years.
>>
>> Radios in the stores? Now THAT *IS* funny. You'd better have another
>> look:
>>
>> http://tinyurl.com/nnl79
>
>
> Why is Sirius in 60% of the satellite radio equipped Toyotas and
> Nissans? Why is Sirius owned by 73% of all satrad Canadians? Why has
> Sirius ass kicked XM in subscriber additions for a year now? Could it
> be that Content is King?
>

Why is all that momentum going to be stopped in its tracks once people
figure out that the programming on most of the stations sucks and is too
repetitive? Just look up the plays for U2 on any given day

[Lowdown in Lodi]

>
> Why is Sirius in 60% of the satellite radio equipped Toyotas and
> Nissans?

Why do you keep saying this when we all know it isn't true?

> Why is Sirius owned by 73% of all satrad Canadians?

What evidence do you have to back this up? (Answer: None)

> Why has
> Sirius ass kicked XM in subscriber additions for a year now? Could it
> be that Content is King?
>

It hasn't. XM had more gross subscriber adds than Sirius in Q2.

[DWJ]

Sirius has better sound quality, especially on the talk channels.

[Rich]

XM had more gross subscriber adds than Sirius in Q2.

ROTFLMAO!!!!! You think this is a good thing???? LOL!!

[David]

On Sat, 19 Aug 2006 05:46:22 GMT, "Lowdown in Lodi" <Lodi@lowdown.com>
>More advanced technology? You can't possibly believe this. Why do
you
>think Nissan and Toyota entered into factory install exclusives with XM?

Because XM gave away the farm?
> It
>was because XM could deliver technology Sirius is unable to touch. XM is
>years ahead and Sirius doesn't seem to be catching up. Even 2 years after
>XM announces its first wearable device, Sirius finally announces one and it
>is nearly as big as XM's Generation 1 device, with less battery life. The
>remark is absurd.

Perhaps Sirius wants to get one that actually works and is legal
BEFORE they take the good peoples' hard earned bongos.
>
>Besides, as I have pointed out, no amount of "technology" will allow Sirius
>to recover from (a) its choice of a severely inferior codec, a problem which
>cannot be corrected in the forseeable future, and (b) its choice of an
>inferior satellite configuration, something they are trying to correct over
>the next several years.

Is that why XM sounds like a dog peed on my speakers?
>

>
>

[David]

On Sat, 19 Aug 2006 07:48:39 -0500, "DWJ" <djigoo@comcast.net> wrote:

>Sirius has better sound quality, especially on the talk channels.
>
Certainly sounds better on my MTX split wedges.

[Lowdown in Lodi]

> XM had more gross subscriber adds than Sirius in Q2.
>
> ROTFLMAO!!!!! You think this is a good thing???? LOL!!

Of course it is. It is bad that both companies are losing too many
subscribers to churn. And both companies need to get control of the churn
situation. But Sirius lost fewer to churn solely because they don't have as
many subscribers.

But it is significant that XM was able to add more gross subscribers than
Sirius in Quarter 2 while spending less than half per subscriber added.

[Lowdown in Lodi]

>>think Nissan and Toyota entered into factory install exclusives with XM?
>
> Because XM gave away the farm?

What are you talking about? There is no evidence that XM gave Nissan or
Toyota a damned thing.


> Is that why XM sounds like a dog peed on my speakers?

No, the dog probably peed on your speakers.

[Lowdown in Lodi]

> Sirius has better sound quality, especially on the talk channels.

On some talk channels, I think so, too.

Not on ANY music channels, however.

[pwsjr68@hotmail.com]

Lowdown in Lodi wrote:
> > XM had more gross subscriber adds than Sirius in Q2.
> >
> > ROTFLMAO!!!!! You think this is a good thing???? LOL!!
>
> Of course it is. It is bad that both companies are losing too many
> subscribers to churn. And both companies need to get control of the churn
> situation. But Sirius lost fewer to churn solely because they don't have as
> many subscribers.
>
> But it is significant that XM was able to add more gross subscribers than
> Sirius in Quarter 2 while spending less than half per subscriber added.

XM has added more gross subs than Sirius *every* quarter, not just
quarter 2 of this year.

[Rich]

Lowdown in Lodi wrote:
>>What are you talking about? There is no evidence that XM gave Nissan or Toyota a damned thing.



Yep. OJ was innocent too.

[Lowdown in Lodi]

> XM has added more gross subs than Sirius *every* quarter, not just
> quarter 2 of this year.


Excellent point -- thanks for making it.

[David]

On Sun, 20 Aug 2006 22:00:00 GMT, "Lowdown in Lodi" <Lodi@lowdown.com>
wrote:

>
>> XM has added more gross subs than Sirius *every* quarter, not just
>> quarter 2 of this year.
>
>
>Excellent point -- thanks for making it.
>
I'm too stupid to understand how, if churn is the same, and XM gets
more gross subs, Sirius ends up with more net subs.

[Lowdown in Lodi]

> I'm too stupid to understand how, if churn is the same, and XM gets
> more gross subs, Sirius ends up with more net subs.

Don't feel badly -- there are 899,999 other Siriots out there who are having
trouble with it, too.

[CodeMonkey]

Rich wrote:
> Sirius has the best content and more advanced technology and radios in
> the stores.
>

Crackhead.

[CodeMonkey]

Lowdown in Lodi wrote:
> No, the dog probably peed on your speakers.

He's just blaming it on the dog. He did it while in another drunken stupor.

[CodeMonkey]

David wrote:
> I'm too stupid to understand

You got that right.