Sirius investors: You get what you deserve
Today's Financial News - Posted February 11, 2009
All betting is closed. The news is out and Sirius XM Satellite (NASDAQ:SIRI) shareholders are losing big. Shares of the shaky-at-best company are getting closer and closer to becoming worthless. Bankruptcy is now in sight. Who could have imagined?
By Andrew Snyder, TodaysFinancialNews.com
Baltimore – (TFN): Oh my, shares of Sirius XM Satellite (NASDAQ:SIRI) are plunging today on news of a possible bankruptcy filing. Who would have ever been smart enough to foresee such a horrible event coming? The company only had a billion dollars in debt due over the next year. That’s nothing compared to the banks.
Uncle Sam could easily step in and erase a few of those zeroes, right?
Putting all sarcasm aside, I do not feel even the slightest bit sorry for investors wasting their money on this company. Analysts and experts have been screaming for months it was a dangerous crap shoot that would cost investors dearly, yet wildcat investors continued to aim for the fences.
It looks like they are about to strike out.
Shares of Sirius are down by about 40% (from $0.11 to $0.07) at the moment on news the company’s officials are mulling a bankruptcy filing. Whether the rumor is merely a back-handed ploy to get Charles Ergen and his EchoStar (NASDAQ:SATS) to step to the plate or if a bankruptcy truly is pending is beside the point. What matters is shareholders are about to get the rug pulled out from under them.
Short sellers are getting the news they yearned for. Only one other stock, Ford (NYSE:F) has more shares sold short. But you can bet with shares plunging ever closer to the critical zero level most sensible investors have been predicting, those shorts are going to lock in their profits and run. In fact, their buying to cover their positions is likely the only thing keeping shares from all-out devastation today.
Finally… the end
Going forward, what does this all mean for investors? First, it means all betting is closed. The speculation can come to an end and the losers can go home with their tail between their legs… finally.
But more importantly, Sirius’ trouble sends a message throughout Wall Street and Main Street that junk companies with huge debt and shaky-at-best business models are not going to make it through this crisis. In other words, if you are speculating and taking big risks, you are going to lose.
If you continue to place bets on Wall Street, especially in this economic environment, you might as well burn your money. If you want to gamble, go to Vegas. It needs the business.
There are plenty of money-making opportunities out there if you do your homework, TFN’s and HSC’s portfolio proves it, but if you are not willing to do the work needed to succeed and instead merely invest with the herd and the headlines, you are going down.
I am glad the debate surrounding Sirius is about to come to an end. Now I do not have to hear and read the excuses and whining about the company’s management and the problems with “shorts” driving the company into the gutter.
Sirius was a shaky company during a booming economy. Now that the economy is drowning in pain, satellite radio is doing exactly as we said it would. Crash and burn.
Next Article: Expect up to 50% gains from this government dollar magnet in the next 6 months
3 Responses to “Sirius investors: You get what you deserve”
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February 11th, 2009 at 4:23 pm
Analysts and experts have been screaming for months it was a dangerous crap shoot that would cost investors dearly, yet wildcat investors continued to aim for the fences
you mean the same analyst and experts that have got us into this mess (and half the time lie and drive down stocks while saying the opposite…you mean those analyst)
i feel it is sad that you feel so self righteous and get joy off while people lose money
I hope you lose your job
February 11th, 2009 at 4:44 pm
Oh my, I disagree.
It was not analysts and financial writers that got us into this mess, but greedy folks looking to get rich quick, from top-level executives to everyday investors. Whether they used shady derivatives like credit default swaps or they invested in surefire losers like Sirius at $0.14 per share, it is this crowd that abused the investing world and got us into this mess.
Now that the odds won and they have lost their butts, they cry to anybody that will listen. Companies like GM, Chrysler and the shady banks run to Washington. And Sirius shareholders say it is all Mel’s fault and threaten a cheesy class-action lawsuit.
I fail to see how a service like TFN or an editor like myself caused this financial catastrophe. In fact, we are the checks and balances that have been screaming of impending disaster for well over a year.
You cannot say I have not been warning Sirius shareholders for months. I hate to see anybody lose money, but if they still make gambles after being warned repeatedly, I will never feel sorry.
Voting has consequences and so does gambling with your portfolio.
March 18th, 2009 at 1:21 pm
I see you need a new game, now…..LMAO