XMSR

[shawFund]

Never against the market. Follow the trend. Shorting in bull market is suiside.

AOB, SVA, NVAX, TIII, TRAD, LEXR, RMBS, FORD, ... are all back and running up.

[David Randolph]

update???

Didn't you receive the newsletter 422fwhp? Anyway, sorry for the lack of update, due to technical problems on the website that kept me awake all night long and so many stocks to buy, I didn't have time to update this stock. But on the newsletter it clearly said «HOLD SHORT».

XMSR makd a big move up today and it is a fact now that the short term trend is UP not DOWN.

Of course, after it touched $30, it may go down. $27 is its year low. The whole year this stock is within $26-$37 range.

If we buy low and sell today, we could have made 15% profit.

Of course, after the fact it is always cash in the pocket. One can never miss.

Deutsche Securities upgraded XM shares to "Buy" from "Hold," and raised his price target to $33 from $30.

http://finance.yahoo.com/q/ud?s=XMSR.

Deutsche Securities did a favor to XMSR, a company that may very well face bankruptcy in the future. The company sells more and more but it loses more and more money and goes deeper and deeper into debt and it is almost getting out of working capital. Quite like GM or F, for example, almost no working capital. That is why GM and F trade at a tiny fraction of its revenues ... yet, XMSR trades at 13 times revenues.

Anyway, because the stock wasn't able to break $27 on the downside, and because of this upgrade, bears had to run for the exit. I'm still on the bear camp, but of course losing confidence, since it doesn't pay to be brave in the stock market.

The stock opened a gap at the open between $28.05 and $28.80. I expect it to at least come down to close the gap, now that most shorts covered and the price target at $33 isn't much incentive to buy at $30. I'll use TL4 as protection, if the stock is set to close above $30.04 I'll be forced, by money management rules, to buy to cover this position.

[David Randolph]

I did short some stocks in 2001 or so, but I don't remember it to be so boring. You can only make 100% of profit on the short side, and I should be looking for stocks with more potential than that.

Also, the risk is unlimited, if you don't cut your losses short. Anyway, I'll hold XMSR short a little longer, it may be a good protection if the general market falls this will tank for sure.

Growth at the company is already slowing and it still loses money and dilutes potential EPS:

«XM Satellite Radio, the nation's leading satellite radio company, today announced that it has more than six million subscribers, and projected it will end 2006 with more than nine million subscribers on the strength of breakthrough products introduced today at the Consumer Electronics Show, its powerful content lineup and growth in the factory-installed new car market. XM extended its lead over its competitor in 2005 by adding 2.7 million net new subscribers, and expects more than three million net new subscribers in 2006.»

Growth in the number of subscribers is expected, by the company, to slow from 100% a year to 50% a year in 2006. What to expect beyond that?

Even if the company ever turns profitable, earnings per share will be extremely small.

Anyway, I don't feel excited about shorting at all, I will buy to cover XMSR if the stock is set to close above TL4, tomorrow at $29.96.

[David Randolph]

SIRI tanked 6% today, perhaps the market is starting to see that these two companies are bound to fail, unfortunately  There's not enough working capital and both companies did sold all the shares they could on the hype.

XMSR fell back by the close, but still managed to close positive, after cleaning many nervous shorts. I'm not nervous, but I have money management rules and I don't like to lose much on a single trade (nobody likes it, but I control risk by setting a stop loss on close).

I'll continue with my plan of holding XMSR short for as long as the stock doesn't close above TL4, which for tomorrow stands at $29.90.

[KCScott]

SIRI tanked 6% today, perhaps the market is starting to see that these two companies are bound to fail, unfortunately  There's not enough working capital and both companies did sold all the shares they could on the hype.

I think SIRI fell today beacuse investors just learned 34 million additional shares can now be dumped into the market:

AP
Stern Can Now Sell $200M Sirius Shares
Wednesday January 11, 4:24 pm ET
By Seth Sutel, AP Business Writer 
Shock Jock Howard Stern Can Now Sell $200 Million in Sirius Stock


NEW YORK (AP) -- Just three days after starting his new job at Sirius Satellite Radio Inc., shock jock Howard Stern is now able to sell the roughly $200 million in Sirius stock that he received as part of his five-year deal with the company.

Sirius' contract with Stern runs through 2010, but the company disclosed last week that it was giving Stern and his agent 34.4 million shares of stock right away because it had already reached certain undisclosed targets for subscriber growth under the deal it signed with Stern in late 2004.

On Wednesday, the company made another regulatory filing saying that entities controlled by Stern and his agent, Don Buchwald, would receive the proceeds of the sale of the shares, which could occur at any time. It's not yet clear when or how much they will sell, and Buchwald did not return a call seeking comment.

Nearly all of the stock is going to Stern, but Buchwald also received a substantial chunk: 3.125 million shares, worth nearly $20 million at current share prices, or 10 percent of the 31.25 million shares that Stern received, which are now worth just under $200 million.

Sirius originally said its deal with the shock jock was worth about $100 million per year in cash and stock over the five years of the contract, or $500 million, including costs for producing and marketing the show

But thanks to the nearly doubling of Sirius' shares since then, the value of the stock portion of the contract went from about $110 million to more than $200 million, making the total deal now worth more than $600 million at current stock prices.

Stern could also stand to get even more stock grants as well as a portion of the revenues from advertising on Stern's show if other, "substantial" targets for subscriber gains are met, according to Sirius spokesman Jim Collins. Collins declined to say how large those grants might be or what targets needed to be met in order to trigger the additional payments.

Stern began his broadcasts from Sirius' Manhattan studios on Monday after a long career at Infinity Broadcasting, which is now known as CBS Radio and is a part of CBS Corp.

Unlike traditional radio broadcasts, satellite radio is free from federal decency rules, something Stern long railed against on his show. Stern, a hugely popular radio personality, has promised his fans on Sirius a stripper pole, live sex and other programming that would be likely to raise the ire of federal regulators.

Sirius is engaged in a high-stakes battle with its rival XM Satellite Radio Holdings Inc. to build up programming and subscribers in hopes of becoming profitable one day. Sirius said in its regulatory filing Wednesday that as of last Sept. 30 it had racked up an accumulated loss of $2.4 billion so far.

While neither company is profitable, both have also been quickly adding subscribers, who pay about $13 a month for either service. Sirius ended 2005 with some 3.3 million subscribers, compared with 1.1 million a year earlier and well ahead of its earlier forecasts. XM says it now has more than 6 million subscribers.

Sirius shares fell 38 cents, or 5.8 percent, to close at $6.12 on the Nasdaq Stock Market Wednesday, while XM shares fell 6 cents to close at $29.52 on Nasdaq

[willey]

Hi Folks,

#1, We're in a bull market!

#2, Shorting anything now is dangerous ( reversals can be swift )

#3, Friday, the Dow stocks should begin really moving up to achieve about 11,500 by January's end.  Dow's ( after some subsequent choppiness ) heading for 13,000

I'd suggest spending efforts on long plays that'll make you rich!

$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

my thoughts,

willey

[David Randolph]

XMSR is coming down after touching TL4 with the help of a Deutsche Securities upgrade. I'm still on the bear camp on this one and I think it will ultimately break $27 on the downside, after the current distribution phase.

I'll continue holding XMSR SHORT, unless it is set to close above TL4, today at $29.85.

[David Randolph]

XMSR continues to play around with common stock investor's money:

XM Satellite Radio Holdings Announces Quarterly Dividend on Series B Preferred Stock

Since the company is running out of cash, now it will pay dividends to its Series B Preferred Stock holders in common stock, common stock that will probably be sold on the open market, further depressing the stock price.

«The dividend is payable in shares of the Company's Class A Common Stock at a rate of $1.0313 per share of Series B Preferred Stock owned, with fractional shares to be paid in cash. The shares of Class A Common Stock to be issued will be valued at 95% of the average daily price of the Class A Common Stock for the 10 consecutive trading days ending on January 12, 2006. The dividend is payable as of February 1, 2006, to Series B convertible preferred stockholders of record of XM Satellite Radio Holdings Inc. as of January 20, 2006.»

This will probably make XMSR stock to sink, I hope so, since I'm short the stock, I believe for a good reason.

I'll continue with my plan of holding XMSR SHORT, unless it is set to close above TL4, today at  $29.79.

[David Randolph]

Reading XMSR's Yahoo! board, beside a few laughs, gave me the notion that I'm not alone on this XMSR short position.

Today this short position helped the Stocks on Fire Portfolio to rise 0.92%, on a day that the S&P500 declined 0.36%. A few shorts makes the portfolio balanced and protects it against the general market risk.

I welcome a few short positions to the Stocks on Fire Portfolio, say 3 stocks (I wish I still had REDF short, big sell off today, I was right, but I let the pressure build and made a bad decision).

I'll continue with my plan of holding the stock short for as long as it is set to close below TL4. For tomorrow that trendline stands at $29.79.

[Gu$tavo]

Today this short position helped the Stocks on Fire Portfolio to rise 0.92%, on a day that the S&P500 declined 0.36%. A few shorts makes the portfolio balanced and protects it against the general market risk.

I agree,,, so I'm always short in 2 or 3 stocks.

I welcome a few short positions to the Stocks on Fire Portfolio, say 3 stocks (I wish I still had REDF short, big sell off today, I was right, but I let the pressure build and made a bad decision).

You did right at that time with REDF...  I had to cover too with an small lost(-2%) and today I'm short again but with + 6% ... so... where is the problem ?

[poorman1]

Shorted today.  My first bearish trade since I bought Puts on XMSR 2-years ago (January 2004).  I bought the puts when the stock experienced a high volume top (20 million shares) at $29.  Within 2 weeks it was at $22.  My puts gave made an easy 275%.

I believe the time is right for XMSR to tank.  David's chart clearly shows lower highs and lower lows, with high-volume on each successive price spike.  Also, NASDAQ and global markets are turning bearish.  A 50 pt decline in NASDAQ should not be ignored.

The only way XMSR survives from quarter to quarter is to issue more shares.  The news on Jan. 13 should be a red flag to any longs.  Preferred shareholders to recieve a common stock distribution.  Further dilution means oversupply.   

[David Randolph]

Shorted today.  My first bearish trade since I bought Puts on XMSR 2-years ago (January 2004).  I bought the puts when the stock experienced a high volume top (20 million shares) at $29.  Within 2 weeks it was at $22.  My puts gave made an easy 275%.

I believe the time is right for XMSR to tank.  David's chart clearly shows lower highs and lower lows, with high-volume on each successive price spike.  Also, NASDAQ and global markets are turning bearish.  A 50 pt decline in NASDAQ should not be ignored.

The only way XMSR survives from quarter to quarter is to issue more shares.  The news on Jan. 13 should be a red flag to any longs.  Preferred shareholders to receive a common stock distribution.  Further dilution means oversupply.   

I totally agree with your reasoning poorman1 

If XMSR breaks $27 on the downside I think it will fall $5 quite rapidly. I still feel sorry about that REDF short trade, it was such a perfect and legitimate trade ... the stock fell 25% right after I bought to cover, on a slim cut of the resistance level (just 6 cents, if I recall correctly).

Well, I kept the lesson ...

I'll keep on holding XMSR short, already in the green 

[poorman1]

Before I decide to take a bearish stance on a stock.  I like to print the chart and turn it upside down.  If the upside down chart looks like a buy, then it should obviously be given a sell recommendation. 

[David Randolph]

Before I decide to take a bearish stance on a stock.  I like to print the chart and turn it upside down.  If the upside down chart looks like a buy, then it should obviously be given a sell recommendation. 

That's an excellent idea poorman - let me give our users that perspective on the first chart below. That is a perfect ascending triangle that is on the verge of a bullish breakout. The technical target of the breakout is $32-$27 = $5. $27-$5 = $22.

I'll continue holding XMSR short, expecting it to break $27 on the downside soon.

[David Randolph]

What an extraordinary technical development on XMSR: the stock finally broke $27 on the downside, with extremely heavy volume of 18 million shares traded.

I said this company is running out of working capital, didn't I? It needs to keep on selling more and more shares on the open market to finance operations and investments. If it ever becomes profitable, earnings will be so diluted that investors will feel very disappointed.

Yesterday we had news of a conversion to common shares at price $3.18 

The technical target of this breakdown is $22 and I expect to cover my short position around that level.