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JJC: At
long last!... At long
last, it looks like the
tyranny of terrestrial
radio may finally come to
an end!... That the
FCC will agree to what the
Department of Justice's
Anti-Trust division ruled
in March... that the
merger of
Sirius Satellite Radio
Inc. (SIRI)
and
XM Satellite Radio (XMSR)
is not monopolistic, and
should be allowed to go
through!
Now that the chairman of
the FCC, Kevin Martin, has
expressed his approval for
the merger, you'd think it
was pretty much of a done
deal, right? I'd like to
hope so but, if there's
one thing I've learned
from the saga of SIRI and
XMSR, it's that there's
always another obstacle
lurking... as the
opponents of the deal are
so entrenched that they're
likely to do anything to
put a stop to it.
. . . .
.
There is no issue I've
been more of a crusader on
than this one, as this
government has allowed so
many of what are, in my
opinion, anti-competitive
deals, through over the
last 20 years of
laissez-faire
anti-trust... Oh, but when
it came to SIRI and
XMSR... so scary and so
dangerous!... All of the
sudden, our regulators
decided to get tough on
anti-trust...
This is a deal that's
taken longer... precisely
one year and 119 days...
had more congressional
hearings... four
hearings... than what I
think was the completely
anti-competitive - and you
know it, because you pay
at the pump - Exxon/Mobil
deal... In our infinite
wisdom as a government, we
thought that Exxon/Mobil
was less of a danger to
you than XMSR and SIRI...
and why?... Because the
National Association of
Broadcasters, the lobbying
arm of terrestrial radio,
has been throwing money at
congress!... And, in
addition, silently
blackmailing every elected
official with the
potential threat of a
vocal radio... vocal
radio... going against
them during the next
elections.
All right, don't get me
wrong... they're not
actually blackmailing
anyone, but what
congressmen want... What
congressman would want the
local radio stations to
turn against him?...
something they could do,
if that congressman
supports this dreaded,
anti-competitive,
dangerous deal...
. . . .
.
But now... Now everything
comes down to five people,
step-by-step,
inch-by-inch... There are
five people. The five
members of the FCC (i.e.,
Federal Communications
Commission) and, since we
know that Kevin Martin,
the chairman, is in favor
of the deal, that leaves
us with four. We need two
more votes in the FCC
besides Martin's. And I
think it's very doable,
given the fact that the
FCC is slit 3 to 2, in
favor of the GOP...
We've got one vote from
the chairman. I'm betting
Commissioner Copps - a
democrat - votes against,
as he has said in the past
that he is not convinced
the merger should be
allowed to proceed. He's
irredeemable.
Then there's Commissioner
Adelstein... the second
democrat... who thinks the
FCC should consider the
concerns of the State
Attorneys General on the
deal. Okay, wait a
second... I mean, this is
the most national deal...
XMSR and SIRI, they're
nationwide. The federal
Justice Department has
said it's okay it is
nationwide. No... He wants
to go with the State
Attorneys General. Why not
break it down even
further... how about
getting some input from
the mayors?...
Now, there are two likely
votes against... but
Commissioner McDowell...
This guy, well he said the
market seems to be larger
than just satellite
radio... something we've
said on this show from
(the start)... I mean,
he's including iPods,
terrestrial radio, CD
players... this guy must
have kids right... So,
he's a likely yes.
Commissioner McDowell,
you've got horse sense.
Okay, that leaves
Commissioner Tate, the
woman in the picture, as
the arbiter of the fate of
this most important deal.
Yes... not just the
arbiter of this merger
because, if it doesn't
happen, at least one these
companies will go under...
probably XM...
. . . .
.
All this deal does is
insure a viable competitor
to terrestrial radio. If
anyone's behavior has
monopolistic, it's the
old-fashioned radio
companies trying to
destroy a new source of
competition.
This is about whether we
have satellite radio
period, so Commissioner
Tate, I beg you... I
beseech you... please
support this deal! Tate's
a republican. I know she
wants to do the right
thing. We're counting on
her to make it happen. If
Tate plays ball, then Mel
Karmazen (CEO of SIRI)
gets this deal done. We're
going to see a radical
change in the way these
companies do business.
The auto companies, for
instance... the chief
market for satellite radio
companies... have pitted
these two players against
each other mercilessly. So
has talent, major league
baseball, football, golf
and Cramer-fave, Nascar...
I think Mel will change
all that, paying less for
programming and getting
more from the auto
companies for each
satellite radio. Mel is
money...
. . . .
.
But the real benefits of
this deal, in terms of
revenue and cost, I
expect, are going to come
down the road. They don't
mean much immediately,
because of the three-year
(freeze) on prices. No.
What matters in the near
term is one thing...
refinancing. Both
companies are always in
danger of running out of
money and, as separate
competitors, it's hard for
them to borrow... but the
equation changes when SIRI
and XMSR merge. Then they
can go hat in hand to Wall
Street, with a good bond
deal that people will no
longer worry about
defaulting. That's why,
combined, these stocks are
so good... right here,
right now.
There's no quick way to
monetize the two companies
when they combine though.
It isn't a short-term
gain. The approval process
should boost prices
briefly, but the combined
Sirius/XM will be a
terrific long-term play, a
dominant company that will
pretty much destroy
terrestrial radio. This
may be the biggest reason
the radio stocks continue
to trade down, and CBS
continues to be brought
down by its radio
division...
People hate commercials.
They will flock to a
viable satellite
alternative.
Now here's the bottom
line...
. . . .
.
The Bottom Line!:
Commissioner Tate... Our
nation turns its lonely
eyes to you... we're
banking on you. I
ask you... Should we be
forced to only have
terrestrial radio?...
Or can we let
Sirius Satellite Radio
Inc. (SIRI)
and
XM Satellite Radio (XMSR)
combine, so that consumers
can have a choice between
free commercial radio...
filled, of course, with
commercials... and
paid commercial-free
radio. I'm betting
this deal goes through,
and I maintain that,
together, Sirius and XM
will be a powerhouse.
Maybe not immediately, but
soon. And, somehow,
I think the merger will be
more consumer friendly
than that terrific
Exxon/Mobil combo, which
sailed through antitrust
without much of a problem.
. . . .
.
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JJC:
We're getting down to
Chile today... to
celebrate an economy that
is
pants-ing ours on a daily basis...
And a Chilean company that
is the triple-play of
stocks...
It's got Latin America
going for it... It's
got agriculture going for
it... And it's got
batteries going for it...
the kind of lithium-ion
batteries we're developing
for hybrid cars, and
plug-in batteries to take
advantage of off-peak
energy generation...
storing the excess energy
for peak hours, instead of
letting it go to waste...
Why Chile?...
This is the capitalist
Chile!... Not the
socialist Chile...
While our country is
expected to grow GDP
(i.e., gross domestic
product) at 1.2% this
year... and how paltry is
that?... we're
pathetic!... Chile
posted a GDP growth of
4%... just in the last
quarter of 2007.
It's expected to put up
3.8% GDP growth this year.
While budget deficit
equivalent in size to 2.4%
of GDP, Chile has a budget
surplus that's 7% of its
GDP...
How about some insult to
injury?... The
Chilean peso has
appreciated 8%, versus the
dollar in the last year.
Now, look, I'm always
saying that you need at
least 20% of your
portfolio in foreign
stocks, and this is the
reason why foreign
countries are kicking our
collective economic
butts!...
And my favorite Chilean
company... not the
phone company, which I
like very much... This one
is what I call the
triple-play of stocks...
is...
Sociedad Quimica Y
Minera de Chile
(SQM)...
The Chemical and Mining
Company of Chile, if
you're a stickler for
translations.
. . . .
.
Now, SQM has been a
perennial favorite of
Cramer... I've been
recommending this one for
literally since 2005...
First, it was at $11.47...
Then, on August 21st of
2006, at $10.79. It came
back on November 27th of
2006, at $13.20... as well
as other side
recommendations and
countless other buy, buy,
buys...
The stock is now at $47
bucks... So, we're up
311%, 337%, and 257%
respectively... Two
quadruples and a triple,
and I'm not done...
SQM has been a huge winner
for you, and I think it
keeps on winning...
because SQM is the true
triple-play stock. We
already have the Latin
thing, which everybody
seems to love right now.
Then there's the ag
exposure... agriculture.
The company is 49%
agriculture, making half
of the world's potassium
nitrate... half! This is
the fertilizer used in the
planting of fruits and
vegetables. It's in
competition with POT...
the fertilizer, not the
company, with potassium
nitrate, right now, being
the cheaper fertilizer.
That's why we're shifting
over to this.
. . . .
.
Given the global
fertilizer shortage, with
Cramer-faves,
Potash (POT),
Agrium (AGU),
and
Mosaic (MOS)...
all hitting 52-week highs
today, I think potassium
nitrate prices and, by
extension, SQM, will start
playing catch-up...
And then there's the third
part of the SQM
triple-play... batteries!
That's right, batteries!
SQM is the largest
producer of lithium in the
world, and it's expanding
lithium production by 40%
in the second half of the
year. Can you imagine?...
. . . .
.
This company really is
without rival as a lithium
producer. Even if, right
now, lithium only makes up
15% of its revenues, I
predict it's going to
become a much, much bigger
portion of SQM's business.
Lithium demand has grown
at a 7.5% clip. I see that
increasing to about a
quarter of the world's use
for batteries. And, since
lithium-ion batteries seem
to be poised to be the
foundational technology
for true plug-in electric
cars... which you know is
the way to beat OPEC...
and
environmentally-friendly
hybrids... which you know
is the way to cut down on
emissions... not to
mention plug-in batteries
that utilities can use to
capture excess energy
produced during non-peak
hours, then pour it back
into the grid during peak
times...
This seems like a good
time to be the world's #1
source of lithium, doesn't
it?...
. . . .
.
Hey, today, I get up...
what do I hear?... Samsung
and Bosch, in South Korea
just announced a joint
venture today to produce
lithium-ion hybrid vehicle
batteries by 2010... Hey,
that's right around the
corner. This is just one
more lithium battery
initiative that could make
SQM all the more
attractive...
Now, despite the fact that
SQM has been an incredible
performer that's got its
hands in what I think are
two of the most fabulous
growth areas right now...
It remains an unloved
stock on Wall Street...
There is very little
U.S.-based research,
despite the fact it's a
$12 billion company that I
think is of supreme
importance, given its
prominent position as the
world's #1 purveyor of
lithium. SQM is unloved on
Wall Street, because of
its ownership structure...
with Julio Ponds and
Potash owning 62% of SQM's
stock.
I don't care! That may
scare the Street away, but
it doesn't scare
Cramer!...
. . . .
.
This is just too good an
opportunity to pass up...
It's in Latin America,
it's a fertilizer company,
it's part of the ag bull
market, and it is a source
of the substance that
should be the future of
batteries in
automobiles... lithium!
. . . .
.
The Bottom Line!:
I think that you should
say, "Si" to
Sociedad Quimica Y Minera
de Chile
(SQM)!...
. . . .
.
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