Sirius Satellite Isn't Worth Betting Against

05-03-2005

Everybody's got an angle on everything. Oh sure, Sirius (SIRI:Nasdaq - commentary - research) CEO Mel Karmazin talks a big game, but Clear Channel's (CCU:NYSE - commentary - research) got 10 times the revenue base; short Sirius, go long Clear Channel. Mel's charismatic, but XM's (XMSR:Nasdaq - commentary - research) way ahead in customers and cash flow; buy XM, short Sirius. Yeah, Mel may know that terrestrial game, but he's inherited a huge amount of overhead and excess contracts; short Mel, go long the S&P 500.

Blah, blah, blah.

Last night I believe Mel Karmazin demonstrated on my television show, "Mad Money," the reasons he is not so lightly dismissed. ("Oh Cramer, come on, he just did his usual sales job and you bit. There's nothing there." There, I'll even give you that counterpoint.)

Almost everything in business is selling. Sure, there is a tech component that's not selling, but that can be purchased. You need someone who believes to go knock on doors and make things happen. Karmazin is that guy. He's knocking on the doors and he is making things happen.

I see in his eyes the same thing I saw from people who first started the cell-phone companies in the 1980s, from the people who worked at Intel in the early 1990s, from people who started the Yahoo!s and the Googles just a few years ago. Those people knew they had something. They were zealous about it. They knew they had something people wanted and needed and craved. Most people don't have that. Most have to stimulate demand or cajole it or beat it over the head to make it happen.

Sirius is in a position similar to Yahoo!'s when Yahoo! was in the teens a couple of years ago. It was too big to be acquired, no one believed in it and it seemed wildly overvalued. Now, I don't think that Sirius has the same ability to have explosive growth, but I do believe that every car in this country is a candidate for its product -- every car. That's a big market.

So, go ahead and scoff. Go ahead and short. Sometimes, though, you just see it and you know it. You see the real deal and it stands out.

Sure, I wish it were at $2 again. That would be terrific. Then everyone would know to buy it.

It's not going to happen, though.

I don't expect to convince any of the nonbelievers out there to buy it. I just have to have people understand that it isn't worth betting against, that Mel's not worth betting against. If I do that, I have done the right thing.