Sirius Investors: Decline in OEM Take Rate Something to Watch

by: Tyler Savery November 21, 2008 | about stocks: SIRI    

Tyler Savery

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In the latest quarterly filing by Sirius XM Radio (SIRI), the OEM take rate (on a proforma basis) was stated to be at 47%. This figure was compared to 50.7% the year before. While 3.7 points may not seem like much, it translates into millions of dollars.

If we assume that a typical quarter brings in 1,500,000 new OEM subscribers, what would all of this mean?

At the 50.7% take rate, 1.5 million cars would bring in 760,500 subscribers. With an ARPU (Average Revenue Per Unit) of $10.15 per month, this would mean quarterly revenue of $23.2 million from this group.

At the 47% take rate, the 1.5 million cars would bring in 705,000 subscribers. With an ARPU of $10.15 per month, this would mean quarterly revenue of $21.5 million from this group.

The difference is nearly $1.7 each quarter. It may not seem like a lot, but it does add up. The take rate will be the latest reason that some analysts will adjust their targets downwards. While the numbers are not yet big enough to consider threatening, they do bear watching. Because this is the first quarterly report of the combined company, people should watch all metrics closely to see if the trending is going in the appropriate direction.

Position: Long Sirius XM.

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This article has 103 comments:

  •  
    Nov 21 03:37 AM
    Don’t talk bad about Sirius here are you will be absorbed. (READ FAST)

    Can it be more obvious that Sirius pays advertisers, bloggers, and people to post good things about Sirius?

    Well, Mel the vote is pretty much over. You can stop paying people to post confusion and start paying for Xmass sales. Like you have a clue what the company needs (You don’t). I want to know how much Sirius paid this quarter for blogging advertising?

    STOCK PREDICTION

    Sirius at .06 before the split…
    50 to 1 split puts it at 3.00
    Shorts continue.
    When it hits 1.00 after the split Mel will take it private 50 million on the cheap…

    Yes, I am already prepared to sue Mel directly when he does the reverse split.

    Economy hell, Mel is just another NWO elitist clown…
    Reply | Link to Comment
  •  
    Nov 21 03:42 AM
    SIRUS AND CAR SALES BAILOUT

    IMO, the next 14 months is going to be all down hill. Inflation is nothing like it will be in a few more months. Jobs will be lost and homes will be lost. People will not have money to buy cars. God I hope I am wrong.

    Upside, Remember the 70’s?
    If people have the money we have “not one set” but “two sets” of car sales booms to look forward too.

    First, people are already moving to efficient vehicles, compact and new technologies. Boom, Boom, Boom, China and Mexico will make loads of money, Thank you NAFTA.

    Second, as gas prices lower with US local oil now allowed again, the gas monopolies will once again take out all the competition and new technologies just like in the 80’s. People will want those big gas hogs again.

    As the economy improves and gas companies adjust in the endless cycle of consumer gouging, people will forget about solar, electric cars and demand that “umph” on the peddle. All good news for automakers because they just keep cycling the same old…

    Vote No to REV-Split
    Vote No Mo Shares
    Kick Mel Out!

    Reply | Link to Comment
  •  
    Nov 21 03:46 AM
    Mel did all this before.

    He built a solid foundation and tanked the stock. Then, he used a special Vehical to buy up the stock. Then he took it private for a few years. When the smoke cleared, Poof, you had Viacom...

    Tanking Sirius was the plan. Mel is a historic and confirmed crook. We are the chumps!

    If we only knew about his history...
    Reply | Link to Comment
  •  
    Nov 21 04:31 AM
    Sirius Paid Propaganda Explained



    The next step will be for one of the paid crew to post a long, long blog about nothing. Then, the next blog will be a short argument over some unrelated point. This will go on the 5 or 6 more post to cover up the real post.

    Usually Cos will come in with some 5 paragraph description of some trend. Next the other two paid bloggers S163, and RELMOR or MIGHT BE SIRIUS, SIRIUS DEPRESED and more user names will all “ HAIL Cos for his expert opinion that we all should follow.

    Now, when some one post that any of these guys are leading (Influencing Investors) a session of 4 posts will follow all telling the guy how dumb he is for taking advise from this board. That is exactly what they are paid to do, lead and not take any blame for posting optimism continuously about Sirius.

    I have seen these guys use more than eight user names each. All posing good Sirius propaganda. They introduce each other with amusing techniques. My personal favor introduction of a new user name is when all the paid bloggers take tern welcoming some unknown back to the board. Yes, these things are done 20 times a day to cover up any true thinking about what a bad company Sirius is and what a crook is Mel.

    Yes folks, Sirius is spending your money in advertising. But this season it is not to sell subscriptions. Mel is spending money to get people to vote for the reverse split so he can buy Sirius up cheap.
    Reply | Link to Comment
  •  
    Nov 21 04:43 AM
    Do you know you can read the history of every user here and every comment they have made? Well just click on the user name and read the history. You will see months of propaganda! Liars!

    But, for this blog you must expect lots of new user names all spamming my comments. That is how it works. I hate liars, but this has become just plain funny.
    Reply | Link to Comment
  •  
    Nov 21 07:33 AM
    SirusDun,

    So now Mel has two RS options in Florida

    a) RS - Reverse Split
    b) RS - Run for Safety

    I suggest third option
    c) RS - Refinancing Soon

    LOL
    Reply | Link to Comment
  •  
    Nov 21 08:04 AM
    Can someone please explain why it is legal (?) for a MM to instill a bid/ask spread of .0001? Cos? Relmor? Mike? Are there any restrictions on market makers relative to these spreads? Info appreciated...
    Reply | Link to Comment
  •  
    Nov 21 08:06 AM
    RS ~ Returns Shitty!!!

    Reply | Link to Comment
  •  
    Nov 21 08:08 AM
    Holy shit... An equity with more shares short than us?

    www.shortsqueeze.com/?...
    Reply | Link to Comment
  •  
    Nov 21 08:34 AM
    Hey! give it a break. It's a $0.14 stock and it has more attention then the coming depression? Why is it so important to kill this company? Will it get all this attention when it gets kicked off the exchange? At least GS is getting it's due, maybe it's heading for the Bail out Road.
    Reply | Link to Comment
  •  
    Nov 21 08:38 AM
    SIRI needs to get away from the car business model immediately!!!! I like to listen to music in other places besides my car. Get a deal with apple,RIMM, etc. Where's Mel??????????
    Reply | Link to Comment
  •  
    Nov 21 09:22 AM
    The consumer is not going to have enough money to buy anything but essentials. They certainly are not going to be willing to pay for radio just so that they can hear U2 or Sinatra whenever they like. Bailout or not, the autos industry is in for a world of hurt. Credit is the issue, and we have only seen the beginnings of it. You think housing was bad? Wait until the credit card defaults start en mass. Americans did not know the consequences of imprudent borrowing. La de da. They are about to learn.

    Ouch.
    Reply | Link to Comment
  •  
    Nov 21 09:40 AM
    Mel = MELtdown
    Reply | Link to Comment
  •  
    Nov 21 09:41 AM
    Yeah...sirius/xm is in the tank. You would think that with regulation they would remember the "viacom" experience and keep a freakin collar and a short leash on this guy. That's government at work for ya! Whatever happens will happen and there's not a whole lot that we can do about it. Up to recent weeks I was actually considering buying up some of this cheap stock, but not so much today.
    The car business model was and is "not" a great idea today. They can't really get away from it now, I think that it's taking care of itself that way on it's own in the car market. I've been a subscriber for a number of years now with sirius and I do love it and will continue to pay for it as well. Good luck to you stockholders and may the schwartz be with you!
    p.s. I'd love to get paid to BS on anything! Where do i sign up? lol
    Reply | Link to Comment
  •  
    Nov 21 10:10 AM
    SirusDun................. { should read SirusDunce }. Pathetic.
    Reply | Link to Comment
  •  
    Nov 21 10:15 AM
    Scot here. Or should I say Rip Van Winkle here? Have I missed something? I bought Sirius stock at $6.50 during " Howard Hype", a little more at $4.50, and a little more at $2.80. And from there, I guess I was asleep went it sold for $1.50 post-merger, and now today, I wake up and see it at .15.

    What the hell happened?

    Lord, I feel like Rip Winkle where I've awakened from an extended slumber and the world is not the same world I feel asleep to so many years ago.

    Unbelievable....

    Oh, there is one more thing: If I had known that I would awaken to this nightmarish news, I would have stayed asleep....

    Scot's Slant

    Scot's Slant
    Reply | Link to Comment
  •  
    Nov 21 10:19 AM
    Michael Lofrano............ you are so right about the upcoming credit card defaults. Prepare yourself.
    Reply | Link to Comment
  •  
    Nov 21 10:20 AM
    Mornin Scotty........... killer.
    Reply | Link to Comment
  •  
    Nov 21 10:29 AM
    THE TIME HAS COME FOR NATIONAL SPONSORSHIP! Sirus Xm can survive by implimenting HOURLY NATIONAL SPONSORS. Sirus Xm of course have no advertising on their Music, Comedy or other formats of News &Entertaiment. There would be no commercials run, just brief periodic mentions (concurrently on all channels mentioned) of who the hours programming is being sponsored by with a possible tag line added. Example: This hour's of music is being sponsored by our friends @ Coca-Cola "Thing Go Better w/Coke". Also you could display the sponsors name or logo on radio's screen. STAY WITH ME! NOW COMES THE GOOD PART! If a good sales package program is put together and say you could charge the sponsor $10,000 for the national hourly of exposure for their product (on average). If you do the math of 24 hrs X 365days a year it comes out to over $840,000,000 per year. So even if you start of @ $5,000 per hour you can see the revenue this would generate. This format would not water down the down the programming like standard commercials. It's simple and would cost Sirius Xm very little to impliment. If Wallstreet saw an annoucement that this "National Sponsorship" was going to even be given consideration w/ the potential revenues thrown out there I promise you it would be the needed spark to get this stock back on the incline. If you read this please express your support on as many of these blog sites as possible. I've forwarded this concept to Mel Karmazin's office and so far no response. But I have e-mailed my actual detailed plan to people in the know (Tyler Savory & Others) and I get the same response. They think it's a sound idea and are not exactly sure why Sirius Xm is not on top of it. Instead of us complaining lets push for National Sponsorship "IT"S INNOVATIVE @ THE VERY LEAST AND I SEE NOTHING ELSE ON SIRIUS XM's PART TO BE INNOVATIVE"!
    Reply | Link to Comment
  •  
    Nov 21 10:46 AM
    If you think this idea of National Sponsorship has merit and time has come like I do, please contact Mr. Freer's office(investor relations) @ Sirius Xm 212-584-5100 and please voice your support before it's too late.
    Reply | Link to Comment
  •  
    Nov 21 10:48 AM
    What will today bring? I actually saw a trade get through at 9 cents afterhours yesterday. Are we headed that direction or will we bounce? Worse yet will the sideways move continue for the next two weeks as the world digests the auto industry and its future? Do we NEED the auto bail out to be the catalyst for our bounce or will Mel actually break the silence and give the market a sense of progress being made?
    I believe we need the Auto bailout, if only because of the "it might be a lehman" fear grip that the market is pricing right now.
    Reply | Link to Comment
  •  
    Nov 21 11:13 AM
    Neal Barkett - good idea , and a frickin' shame we " average joes " have to come up with innovative ideas to save siri ......is there ANY frickin' vision in that boardroom ??????? ..........Or are there just a bunch of people sitting around going " Duh , maybe if we start a new line-up called Peter Pans Fairy Dust Channel " ........geesh
    Reply | Link to Comment
  •  
    Nov 21 11:18 AM
    Do you think maybe the take rate is slightly lower because people just didnt have as much money during this period because of $4 gas and other factors that have led us to this Meltdown? I think there should be some credit given to the modest loss vs. other retail and media outlets who have gone belly up or reported more than expected losses. This should tell us something about SIRI. Obviously people want it! I think as Gas prices move back to the $1.50 mark and costs start to adjust accordingly the economy will turn and people will have money for SATRAD.

    Right now there is no way to explain the stock price other than manipulation from offshore hedgefunds who could care less whether you or i go to the crapper or not. Hopefully this administration will take some focus on this illegal manipulation and send a few people to jail that have been helping their cause.

    Its just another storm that has to be weathered. This stock is down and as you can see almost everything in the market is. Alot are below their CASH value. None of this makes sense. I think if you have money to invest then reposition yourself and buy while its low. But thats just me.


    Reply | Link to Comment
  •  
    Nov 21 11:27 AM
    how about we vote on the national sponsership instead of a RS or Dilution. Use this ideal along with others that i have heard here and give the Company a jump start. Pretty basic ideas that would probably work. I like it all. Good Stuff.
    Reply | Link to Comment
  •  
    Nov 21 11:30 AM
    Shure46, PLEASE CALL MR. FREER"S OFFICE @ THE NUMBER I POSTED and let's get things rolling. If we just complain nothing will happen. Please be Pro-Active we all have a lot at stake. We believe in the product or we would never have invested. Anybody else looking to be part of the solution not part of the problem.Then please make the call. We can do more by banding together in a positive way.
    Reply | Link to Comment
  •  
    Nov 21 11:30 AM
    You wanna bailout of the auto industry that helps everyone. The government should give every taxpayer who buys an American made car or truck a 15,000 credit against the dealer invoice price. It helps Main Street, it helps the dealers make omoney on their inventory and it helps the automakers.

    It's time that the People benefit from bailouts, not Corporations. Let's call it "Trickle-Up Economics"!!!!!!!...
    Reply | Link to Comment
  •  
    Nov 21 11:32 AM
    Brandon,

    Adjust their targets downward??? Where......to zero? All those numbers had to have been factored by now. Come on.....this action going on now has absolutely nothing to do with quarterly financials. My god, Circuit City has filed for BK and it is selling above SIRI! Look where GM is! Would you invest in that company right now? No, no, the share price has nothing to do with fundamentals any more.
    Reply | Link to Comment
  •  
    Nov 21 11:35 AM
    I agree that Sirius is too deep into the Auto Industry. But the fact is, the suscriber base is currently locked into the Autos!

    Congress and their Blind trusts are DEEP in Financials.... Any other industry is a moot point to them. Siri share price will not go anywhere until Congress treats the Auto Industry like other Countries do. A level playing field for a wide open market (yes the GLOBAL market is just starting up!!) is in order. Even if a ratio of 1 export for every 10 imports would be better that what we have now!


    The Financial market is CLOSED until the New Year.
    Financials will not loan any money until the competitor buying spree has ended!!!
    Reply | Link to Comment
  •  
    Nov 21 11:44 AM
    I'm with you. Do you think it would be a good idea to get us SIRI stock holders organized in a group with our E-mail addresses and names? This would show our strength as a group for a classaction case against Mel and the rest of the board members.


    On Nov 21 03:37 AM SirusDun wrote:

    > Don’t talk bad about Sirius here are you will be absorbed. (READ
    > FAST)
    >
    > Can it be more obvious that Sirius pays advertisers, bloggers, and
    > people to post good things about Sirius?
    >
    > Well, Mel the vote is pretty much over. You can stop paying people
    > to post confusion and start paying for Xmass sales. Like you have
    > a clue what the company needs (You don’t). I want to know how much
    > Sirius paid this quarter for blogging advertising?
    >
    > STOCK PREDICTION
    >
    > Sirius at .06 before the split…
    > 50 to 1 split puts it at 3.00
    > Shorts continue.
    > When it hits 1.00 after the split Mel will take it private 50 million
    > on the cheap…
    >
    > Yes, I am already prepared to sue Mel directly when he does the reverse
    > split.
    >
    > Economy hell, Mel is just another NWO elitist clown…
    Reply | Link to Comment
  •  
    Nov 21 12:31 PM
    This still deosn't answer the quesiton of why are subscriber estimates so low? Even if you assume a 47% take in rate. I was under the impression that OEM penetration, meaning new cars with pre-installed satrad is now getting to be close to 70%. So with SIRI's current 2009 subscriber estimates - they are assuming that roughly 4.6M new cars will be sold next year??? 4.6M X 70% = 3.19M X 47% take rate = 1.5MM new subcribers for 2009, which is what SIRI's current prejections are. This seems ridiculously low. Didn't GM's Wagoner say the industry was looking at selling $10M new vehicles next year, which is still low, but at a OEM rate of 70% that's $7M potention customers who are signing up at a 47% take rate, so why wouldn't they be projecting closer to 3.39M conservatively???
    I guess I don't understand their numbers.
    Reply | Link to Comment
  •  
    Nov 21 12:36 PM
    Ok, please don't yell at me, but what is a "short"?

    I have over 10,000 shares are SIRI. Average buy price is at $1.74 and I still do an automatically weekly investment of $100.00 for this stock.

    Should I keep doing my automatic investments?
    Reply | Link to Comment
  •  
    Nov 21 12:38 PM
    A bid/ask spread of ONE HUNDREDTH OF A CENT? How can MM's get away with this? Or is this a regulated representation of the current buy bids and sell asks? Anyone? Buhler... Buhler?
    Reply | Link to Comment
  •  
    Nov 21 12:50 PM
    stockgal, you sound cute. a short refers to selling a stock short:
    you borrow a share of stock and immediately sell it,
    then at some point you have to buy it back and return the share you borrowed

    so, if you can buy it cheaper, you make money when the stock price goes down. so, shorts make money when the stock price declines.
    Reply | Link to Comment