forgot the name of the house, but one of the big guns came out today and said if XM and SIRI merge SIRI would be worth about $9.50 in synergy cost savings. Lets be conservative in all the numbers I use. You buy the $5 Jun 07 calls for about .25 a pop. You then have 6 months for these two to do what EVERYONE is calling inevidable, and merge. ( Mel is known for creating shareholder value, he is down about 45% on this one this year, do you think he will have another year like this?) If you wake up one morning and these two are one, the stock opens at lets say $6. Your contracts will be worth at minimum $1 per, You are looking at upside of over 400%. Doesn't even seem like that risky of a play, this stock has support in the mid $3 range so your contracts will only decay with time. RR seems fab. Count me in.
technicals look good for siri; chart at this point in time says excellent r/r, prolly best has ever been. treble bottom, nice base and beginning of a breakout, very short term this stock is likely to make u money on the long side. could well fail to go past its average and fall back down taking out previous lows...that's worse case scenario and i dont think it will happen. i hate this company tho.
Sooooo... all us EliteTrader forum looneys are going to create our own self fulfilling prophecy by seeing if we can move SIRI all by ourselves on Monday morning? I'm up for that. LOL!
im gonna do my 500k part...whos with me? in all honesty i wont buy the calls until likely early January. no WAY they will announce a merger in the middle of holiday season to throwuncertainty into holiday sales.
Since the direct-tv-echostar merger was never approved, I cannot see anyone approving this merger either. Plus, we have a democratic congress starting in January. They are not exactly known for creating monopolies. I think if you're going to play this as a merger play you will be disappointed. Sirius believed they would be cash-flow positive either this quarter, or for sure by next. The stock was rising until they came out with lowered expectations. They did not mention whether they would still hit their cash flow with these lowered expectations. If they do become cash-flow positive(xm is still not cash flow positive either) their stock will still rise significantly regardless of a potential merger. If they do announce a merger I will sell 90% of the stock immediately, and buy it back after the merger is shit-canned by congress.
Holy, it wouldn't take 500K shares each... it would only take each of us to hit our orders when there are no sellers willing to sell for the limit price at that moment. Then the price goes up. Then it goes up again if the same convergence occurs again. 100 shares at a time would do it if it were timed right, and there were greedy sellers.
WTF? Every rebate trading monkey and thousands of liquidity black box programs are locked on SIRI. 100, 1000, 10000, or 100000 shares wouldn't budge this stock one penny.
The problem with both XM and Sirius is that their balance sheets are TERRIBLE. I assume it's theoretically possible that a merger will improve this, as they can consolidate operations and eliminate redundancies, but I'm not so sure this will help them to become profitable. The business model is flawed. Just look at the retention rates for subscribers who are given a free term of service when buying an XM or Sirius equipped vehicle - few sign on for an additional term. This is not like cable TV. Few people are willing to pay for radio, and if they're going to go through some trouble, they will just rip their own CDs.
maybe....having another bill to pay ever month is kind of annoying when regular radio still does just fine. im a young guy and satellite radio still isnt all that appealing in a big city. might just be me but i dont see this business taking america by storm. could be totally wrong....wouldnt be he first time.