Will Murdoch Make a Move on Sirius? 227 comments
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With the market cap of Sirius XM Radio (SIRI) hovering at around the $1 billion mark, it is easy to speculate that an interested party could begin to acquire shares, and perhaps even make a bid for the company. Many analysts agree that if the debt issue were behind Sirius XM Radio, the potential for the company improves dramatically.
In normal market conditions, the refinancing of Sirius XM Radio’s debt would not bring many problems. But we are not in normal times. Some feel we are in crisis, and it has become more difficult to disagree with such an assertion. Bank failures, mergers and acquisitions seem to now happen over breakfast on a Saturday. The current situation, across the board, has people more than a bit nervous.
Friday it was rumored that Rupert Murdoch of News Corp. (NWS) has plenty of cash on hand, and may be looking at some deals in the near term. In fact, Murdoch has $5 billion that he may well be looking to use to acquire struggling companies. It would take a small portion of that to make a substantial investment in satellite radio.
Clearly, Murdoch has several media businesses, and a move on satellite could bring about regulatory scrutiny, but there is also a crisis happening, and perhaps Murdoch would be able to bring about such a transaction if he so desired. Murdoch has concentrated in businesses outside the U.S. recently, but is no stranger to the media world in the United States.
Murdoch investing in satellite is a pure hypothetical situation, but looking at it from the standpoint that Sirius XM has such a low market cap, it becomes much easier for virtually any entity with cash to make such a move. Given the current glass ceiling on many equities, including Sirius, a player could walk in and begin garnering shares without much worry about squeezing the price upwards.
With the stock price at .39 cents, financing as an overhang, and the market in general being pessimistic, there are many viable options on the table. Investors in the sector would be wise to consider many paths with regard to this or any equity.
via [Financial Times]
Position - Long SIRI, No Position NewsCorp.
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This article has 227 comments:
Media companies are tricky, and you are right that it would take someone who has owned a media company in the past to be suitable to the powers that be. He is an insider, and would be a welcome help. Get this board out of here, buy us off, or take over control, I dont care. I will vote a resounding no on the reverse slit, and printing more shares. Thats ammo they dont need. I dont believe the bs about why the financing was so bad.
Do you mind me asking, how many shares of SIRI do you own??
you seem to suck on every thread you post....
I realize this is your hypothetical opinion but it seems like a dangerous game of wild conjecture...because to some readers it could suppose that your article will give Murdoch the idea and on that basis, he would execute. JMO...
btw...
>>In normal market conditions, the refinancing of Sirius XM Radio’s debt would not bring many problems.<<
I have to refute that for the following reasons:
1. Market conditions were normal in July. Why didn't they do standard financing then?
2. We now know Mel has lied about #1, in that time was the only reason standard financing was not utilized--which we all bought hook, line and sinker. The reason IMO, is they could not get acceptable terms, even in that "normal" market. Mel stated publically as recently as Tuesday, he is only able to get LIBOR + 6 or 7. My take is this was the same deal he was able to secure in July, which even if LIBOR (currently over 4) is more normal @ 2 , that's still 8 or 9%, which still = too high for the company. Hence the "ugly" financing option in a normal market.
And now in a troubled market, of course we know for sure it's their only option (and as confirmed by the recent Proxy content).
sl62..... I have the same respect for you and your level headed thinking and now very correct cautious attitude. As I am someone confused by these recent requests for authority that, on the surface, are in direct contrast to each other and commitments made by Mel K to the common shareholders, I must also look at all sides to the evidence presented.
In owning any company's stock there must be a solid level of confidence in a company's leadership team that they will succeed and do right by its' shareholders. For me as already stated above that confidence in this company's management team has been shaken but not yet destroyed. I will wait as I also said above to hear from Management before taking any action. Given recent economic events, my investment strategy has already moved to the "trader" mode for 20% of my holdings, not just with Sirius but with all holdings. That percentage increases as opportunities present themselves.
To make myself clear, I agree with your (sl62) reading of the proxy statement that the 8 bil shares will be filed and available and part of the company's total shares available but not yet issued, immediately. I said as much in my breakdown of events above when posting to Gekko13. That does not change the scenario that I then described as being a very real action plan during the month of January 2009. With a little tweaking......
A quick review:
1. Affirmative vote on increasing shares available for trading to 8 Billion from 4.5 Billion. THESE SHARES ARE IMMEDIATELY AVAILABLE TO THE COMPANY SHOULD THEY WISH TO ISSUE THEM.
2. Affirmative vote on the authorization to execute a Reverse Split minimum 1 for 10 existing, up to, 1 for 50 existing. Authorization is good until Dec. 31, 2009
3. Company announces 1 for 20, RS on Jan. 15, 2008. 8 Billion shares are now 400 million shares. Existing 3.2 Billion shares issued become 160 million shares valued at: .37 x 20 = $7.40/sh. Market Cap is the same as Before Reverse Split, $1.184 Billion.
(caution: These numbers can change up or down depending on how the market perceives the news. In this scenario, I am assuming that management already knows who wants to buy their shares.)
4. Company announces that they are offering to put on the Market for sale at a, say..... 13% discount, 140M shares of Common Stock leaving 100 Million shares authorized but not yet issued. 400M-160M(existing shares)=240M-140M(new offering to raise capital)= 100M (shares authorized but not issued)
5. Company reports 140M shares sold at $6.44/share, which allows them to raise $900M to pay off debt and support operations for 2009.
6. The result is that the company now has 300M shares Outstanding with 400 M shares authorized and has raised $900 M to pay off debt and assist in operations. It now has 3.2 Billion shares outstanding and 4.5 Billion shares authorized.
7. To be complete to the investors out there this also means for every 100 shares you now have 5 shares at market which realistically will initially get shaved by 13% or be worth around $6.44/ share through the 140 M share sale announcement. This value will go up or down depending on how it is received by Wall Street.
I am not a person at this point who wants to invest in HOPE. I do think that with all I have said to the negative about the Proxy Statement requests for authorization, that Gekko13 has asked some questions that require further investigation. The above scenario should be reviewed and tested for accuracy and further inquiry. It is but one scenario.
I left this on the other article too...
*******
Thanks for taking the time to lay that out. Maybe you should also email that to the company as in your last letter.
Personally, I don't think this is what they're thinking but I could be wrong. IMO, if this was the plan, would they not have laid the scenario out in the Proxy? Instead it was broad stroke uncertainty allowing for a multitude of combinations and possibilities (going all the way out to Dec '09). Someone should tell the company that Wall Street does not appreciate nor work well with uncertainty. If they were even concerned a little it about the stock price currently, they would have brought forth a specific plan (like gekko/you) have suggested. So...more questions regarding leadership qualifications. I do not anymore think they are concerned about their shareholders and this Proxy goes a long way to reinforcing that.
I want to be clear to all that I have not just "switched sides" or am now a SIRI basher. At this time, just like most serious investors are, I have to be tighter on my criticism on the facts as they are now presented to my by the company. Not through wild baseless accusations or ovbiousness but interpretation of reality. I don't want to be overly negative but if we as shareholders are actually being thrown under the bus (as I now unfortunately believe), I don't want my back turned to the bus so I can jump out of the way, as it were. Mel and the company have changed the game so I'm changing with their changes. Like you cos1000, I'm cautious but will not be making irrational decisions. Unfortunately, we all now find ourselves in an increasingly difficult position regarding our investments. Had they done this at .80 or .70, I might have just called it a day on Friday. Now at .36, scraping the would-be bottom, it makes it ever more challenging to decide what to do. I think there is a real possibility this stock could also go to .05 or even lower given the wrong circumstances--which makes me want to watch that descent from the sidelines, then jump in when the short cover begins. Our questions are enormous right now. Commit new money to try to recoup old positions? Is this the low? Will .05 be the low? When will the short covering begin? How far will the short cover run? We're like in a dingy in the middle of the ocean right now. Without a compass, in which direction would you paddle? My question also is was this the company's plan? To wait until we closed in the .30's to release this Proxy? To cause cloudy decision-making? Helping them get Proxy approval from a bunch of confused investors? I'm skeptical about everything now that looks, sounds, smells or quacks like a duck. How aligned are they really with GS, MS, et al? I will say this. A very public written statement right now from one Mel Karmazin to all shareholders would go a hell of a long way. Uncertainty is now as high as it's ever been for this company. He has contradicted himself and who knows anymore what is real, perceived or accurate? None of this helps us make intelligent decisions to keep from getting hurt further.
I agree and i've been making that point incessantly. It's clear now that the reasons fo the "ugly" financing were an outright lie by Mel on national cable tv. And now he is going to do it again...only this time needs our blessing to kick our own ass. It's like paying someone to beat you senseless.
He couldn't get financing then, period. And he most certainly can't get it now. Turns out SIRI is way too risky for any commercial lender. TrippleC credit rating with huge debt outstanding. So instead they want to use more paper funny money (shares) to fund debt, pay talent, etc...
Puts us in a tough spot to either ride through this madness and phony acounting or hit the road running, wounded but alive. I'm going to be watching and am ready to act. Forget about the shareholder vote. They already know they have the votes to pass. Their main concern right now are the bondholders because without them, this company is DOA. A sad reality to admit.
In the meantime, a good post yesterday from NotVerySmart2...
*I aslo wanted to mention that RegSHO and Anti Fraud rules took effect yesterday, this combined with reverse split gives naked shorts 35 days to cover.*
Why would you reverse split after you issue a bunch of new shares. Just reverse split and issue like 120 million shares at a huge discount.....
Even a 1 for 10 on remaining shares would only create 130 M shares outstanding and with current prices they would have a $3.70 / sh price. At best they could raise, with a 13% discount, $418M and wouldn't have any shares outstanding left for future use. Now that truly would be a foolish way to run the business.
This company is not going to file for Bankruptcy protection in their current state of operations. They will get the votes needed and if they use convertibles to refinance their debt, they won't need bankruptcy to bankrupt the current shareholders. Our shares will be stolen from us as I have said already.
On the other hand, and we who are shaken by the proxy statement are WRONG, and Mel does have a plan similar to what I outlined above, existing shareholders will be present, not whole, on the other side.
Truly if you want to sleep better it is time for you to move on with the next up tick.... For me I am going to stick around a little longer after having looked around at all sides and now waiting for an explanation from Mel.
Do they have to issue shares before they RS? Cos1000 , sl62, please give me some input. What are the advantages of both, and do you see them needing all the shares? ANd do you think they are bluffing for the banks to allow more time to short this stock, so they can get more shares, and have people sell on the way up, as they sold on the way down... Maybe too many people are buying shares cause they dropped it too low, now they need to buy back to cover shorts, and they dont want a huge increase too quickly.
Thanks for the level head. I agree. I'm going to be watching close to see how things go.
relmore...
In The Proxy, it specifically states that the shares would be issued first before a reverse. It says the new shares would be immediately instated in Delaware upon shareholder approval. Whether or not they are activated immediately is the guess. The reverse is open-ended to a point of their choosing until Dec '09. This is the problem. Uncertainty. It's a broad stroke concept with no specificity. Our only known and given is the bondholder deals they are already famous for. Knowing that, it's clear to me it is their intention to do the same thing. How or when the reverse comes in is anybodys guess. Gekko and Cos1000 created a more specific scenario (up in an earlier post this article) but that's hypothesis. The company says nothing of the kind. I feel the same way, they are not giving us anything solid with which to make an informed decision. We know Mel K is a ruthless businessman, we just thought he would be ruthless on our behalf. As it turns out, we are seeing he is being ruthless on his own behalf and we are insignificant to him.
My focus right now is on the present. I will not go through any reverse or share authorization with this company. As you say and I wrote about yesterday, the short-cover has me worried because I now suspect they have been using the short cover all along to disguise buying (to entice more sharholder loaders/jumpers to make more money, for right now when they release this news), and to keep price from tanking. Look at the drift. This is a highly volitile stock. With that bogus short, they have been able to do a nice slow burn tricking people into thinking it was not crashing. Like you also said and I wrote yesterday, this is a classic where to many people (us) load up on cheap prices. Now, of course they don't want you to make the money so out comes the news. I think this was so strategic that their breath stinks. We have been trying to figure out a complex scam that is airtight. Yes, they will have lawsuits but things like Mel buying 2M shares (yeah right, like he gives a crap about those shares, he has 24M other shares), they will plead stupid and oblivious and call it market conditions. The best part of the plan is they knew all along that this time would come, they either get the vote and f us, or if no vote, they file for BK protection and f us that way. Then they emerge with no debt, 20M subscribers and a new company. A la a Kmart.
As of Sept 25 the reported short interest was 199M, down from 236M on Sept 10. We should be getting the 1st October number any day. It will be interesting to see what that number is. Aside from that, If the company restructures with the same bondholders (GS,MS, UBS), the question is do they need to cover their short, or does the new deal just incorporate approximate value with no actual covering to keep price in the tank?
NotVerySmart2 seems to think the short cover will still happen but he didn't seem to me to think it was going to be too significant. We may only be looking at a .10 -.15 move here. Question is how low will this price go? Q3 release scares the crap out out of me. Without a spotless report, topline, eps and guidance, this stock is going down. I don't envision a spotless report--plus taking into account Mel and Co are actually against us, why wouldn't they give plenty of doubt in the report so MM's can drop price another .12 -.15 and get more heavy shares (bought at low prices) back from jumpers? I just don't know if I want to be asking these same questions with the stock @ .20 or .15. It could just die on the vine there or lower. MM's have executed this perfectly and I'm starting to doubt there will ever be a panic cover.
Granted, the Nasdaq rule reprieve is next to a done deal but if their stock gets to .15 or below, I suspect they will reverse before end of this year. Now it's embarrassing for the company. They will want to blow us away sooner than later. Meeting is 12/18 I think.
*Sirius XM Dismisses Auditor Ernst & Young >SIRI*
Bring in a fresh accounting company who will accept master plan without asking questions. Jeez. I hate this. Because whenever a company switches accountants, it's for two reasons. 1. To cover up improprieties or 2. Legit reasons. I wanted to believe at the time it was 2. Now I think it's 1.
Allowing the subs to lend funds to the company, with the same options as the existing Sub-lenders may not be such a hard-sell.
You seem mad?
There is still a lot of time before the vote...
We have 3Q report coming in Nov.
And we don't know what is going on behind the scenes... GOOD OR BAD!
All WE have is SPECULATION now..
Are you going to be ok man..... ??
You sound like your going to have a stroke or something....
I am reviewing the "Hartleib Manifesto" and intend to open a dialogue with him regarding legal options. I believe there may be an exploitable conflict between Karmazin and Apollo/Black.
I hope everyone posting here will retain all current shares long enough to fully exercise their voting rights and will attend the Board of Directors meeting in December (New York is a great place to visit that time of year anyway; take the family to Rockefeller Ctr etc).
Doing nothing makes us all accomplice to our own preventable demise. Is there really anything that Mel Karmazin can say at this point that can change your mind and, more importantly, can be trusted? That bridge has been burned . . . Q3 will be more of the same. The bigger the lie . . . the more believeable.
(Private note to Mel's blog screeners: Tell Mel to hold-off on the new penthouse unit for now; prices will probably be down another 10-15% next year anyway. Better yet, use the mortgage contingency to get out of the contract . . . there's a nice 10 X 10 flat waiting for you; the rent is free, you get free meals and you'll probably be able to listen to the HS show on terrestrial radio).
I thank all of you for your show of support.
This has been a multi-year well orchestrated effort to steal this company away from its shareholders; Sirius Management's goal has not been to enhance shareholder value, it has been to consolidate all of the SDARS spectrum at any cost as the combined entity now controls more spectrum than all of the FM/AM stations combined in the United States. More so, not just in major populated areas but in every nook and cranny in the nation.
This will become a business model that will be worth multiple billions of dollars. The problem is, unless we do something, we will not be the ones that benefit from this. To date, I have spent roughly 3000 hours researching the company's failure to comply with their interoperable mandate and all of the misinformation and lack of transparency on this issue.
Above, I have included the 2nd Amended Complaint filed by Jeffrey P Fink initially on behalf of we - the shareholders - ie: "The Class". With some luck, a lot of work, and approximately $45k spent, I was able to defeat this suit which protected shareholders' rights. This suit was a sham and set up from the start. The suit was brought forward at arm's length by the executives of Sirius to reach a settlement which would provide them complete indemnification/insura... for all of their past corrupt acts. In class action cases, the norm is for the plaintiff's counsel to demand a letter be sent to each shareholder informing them that their rights are at risk and give the shareholders an opportunity to "opt out". In this case, Sirius refused as they argued before the Court, they could not spend the $1million it would cost them to send this letter to their individual shareholders. Instead, they argued that a one-day ad in the back of the Wallstreet Journal would be sufficient notice. I argued that this in no way could be considered due process or proper notification of the Class in which the Judge finally agreed and was going to force Sirius to send notice via the US Mail. Sirius refused as they were concerned about committing mail fraud under RICO statutes which could have led to five years in prison and a $10K fine for each and every piece of mail sent. Three days after this hearing where they argued they could not afford to spend $1M to properly notify their shareholders, they paid Mr. Karmazin $32M for the year - $1M more than the prior year. That was the end of the line for me.
Attached is another letter memorializing a call from Mr. Fink (lead counsel in the case) in which I was offered $500k to allow the sham suit to go on but at the cost of all other shareholders and class members. I refused. The plaintiff used in this case representing billions of dollars in our interest as shareholders is a professional plaintiff by the name of Mr. Greg Brockwell. He lives in a very upscale neighborhood in Duxbury MA and his home has a current value of $1.3M. He also drives expensive cars and owns other properties as well. One must wonder why someone who proclaims to own 1000 shares of Sirius would contact a law firm in San Diego CA and bring forth such a case.
Mr. Brockwell is a member of a litigation kennel. A group of professional plaintiff's that own minuscule, if any, shares in thousands of companies so that when opportunity arises the plaintiff is picked from the litigation kennel, has absolutely no involvement in the case, and is secretly paid for his participation in said case which is a felony.
Once I uncovered all of this information, Mr. Fink, Mr. Brockwell and the Robbins Umeda firm ran for the hills, but before doing so, they converted the class action, that was supposed to protect our interest, to an individual action on behalf of Mr. Brockwell and Terri Johnson only. At the time, I did not understand why they were doing this, but it has since been abundantly clear; as Mr. Fink and his law firm has now hired a high profile prominent defense firm that specializes in high risk, high exposure situations. The defense they are attempting is that when they converted the class action to an individual action, we as a class retained all of our rights, so "No Harm, No Foul" despite the fact that I spent nearly 12 months and $45K defeating this case to retain our rights. Where they are mistaken is that this suit, when it received preliminary class status, prevented us from filing a similar suit as it would have been moot and consolidated with their complaint. Therefore, we lost our right to a fully informed vote as well as the right to stop this merger via an injunction which was the main reason the Brockwell complaint was filed.
If you read the Second Amended Complaint, you will see the egregious accusations made against Mr. Karmazin and all other management of Sirius. Mr. Fink states clearly that if this merger is not stopped, at any and all costs, members of the Class will continue to be harmed. Mr. Fink's fancy footwork by converting the class action to an individual suit was an attempt to protect themselves as they are saying, we as shareholders/members of the class, did not lose anything as we are free to bring an action of our own. Where Mr. Fink is mistaken and incorrect is that his obligation was not to Mr. Brockwell, it was to WE the Class. Mr. Fink owed us a fiduciary duty to protect our interest.
Mr. Fink, in the eleventh hour, threw members of the Class under the bus to reach a settlement that was of no benefit to members of the Class and was going to line his firm, as well as other counsel's pockets, to the tune of millions of dollars. I believe we not only have recourse against Sirius and its executives but we also have recourse against Mr. Fink and his firm for denying our right to a fully informed vote. lulling us into a sense of complacency , denying us our right to stop this merger via an injunction from the court. He and his firm could be liable for hundreds of millions of dollars in damages to we, the shareholders.
I suggest we bring an action against Mr. Fink, his firm and Mr. Brockwell, as they have already shown they know the tremendous exposure they are now facing as they have hired high profile high dollar counsel to protect their firm; evidence that they understand the risk they face. We all need to bite the bullet and contribute monies to a legal fund as well as make our voices heard via a PR firm and potential civil disobedience at the shareholder meeting and potentially outside Mr. Karmazin's place of residence: Trump Tower.
Please, all of you that can attend the December 18th shareholder meeting at Sirius Headquarters MUST. Anyone that has friends or relatives that are shareholders need to be contacted. We must have a large turnout in order for the press to take an interest. I will see to it the press, The Wallstreet Journal, and others will be there but I must know that we are going to have a substantial turn out.
I'm coming from Southern California, have booked my flight, $199 to $249, so prices are reasonable if booked early. If any of you can help by contacting institutional owners, that would be a large help. Also, I don't believe it would hurt if you understand the details and seriousness of Mr. Fink's (ie: Brockwell's) breach of fiduciary duties owed us, that you start contacting the firm, asking to speak to Mr. Fink, and express your outrage as to how he sold out the Class members and that we will be bringing forth an orchestrated and combined action against him. I will also give you numbers of members of the press so that it is not just one voice yelling in the wind, but it will be multiple voices, which will give us more credibility.
It has been merely 2 days and we've received 16 e-mails, several phone calls, and we are just beginning. Next week, I will have information on how to run (and the cost of running) a PR news wire on Yahoo placed next to the Sirius ticker which will advise shareholders we are commencing an action and seeking plaintiffs (ie: participants).
Any other suggestions as to publications, ads run, or any other ideas are most welcome. Please feel free to call me anytime with questions or give me a number in which I can reach you. I know there are a lot of attachments and a lot to digest, but please spend the time to read them as it will help you to understand the depth of the corruption and the length of the battle I've been involved in.
For full disclosure, I am a Sirius Satellite Radio shareholder and hold well over 200K shares purchased at an average price of $4.50. But I can assure everyone, I am more than just a scorned shareholder. This entire situation and the position the shareholders have been placed in is a travesty. What took place in that Manhattan Court Room was criminal and jeopardizes the entire Judicial process (ie: Professional Plaintiffs).
GO TO SIRIUSBUZZ.COM "FORUMS"..... KEEP THE POST AND THREAD ALIVE AND ON TOP BECAUSE MANAGEMENT AND OTHERS FOLLOW THESE SITES CLOSELY. ALSO, THOSE OF YOU THAT POST ON YAHOO, PLEASE SOLICIT OTHER SHAREHOLDERS TO CONTACT ME AT SAVESIRIUS@GMAIL.COM TO PROTECT THEIR RIGHTS AND INTERESTS.
Again, thank you for your help.
Michael Hartleib
Where is the shareholder meeting....
And how do we vote.....
The only shareholder votes I have gotten have been through the mail.....lol?
All my sentiments. A clear case of Mel and company shafting their shareholders in a premeditated way. The problem with a lawsuit is he's done everything strategically barely within "the rules." Though the sequence and clear deception is easy to see, it doesn't necessarily make it provable to be illegal. Because he did things like buy 2M shares, etc... it would be hard to prove collusion or fraud--esp through the ever handy finacial meltdown crisis smoke screen. He nailed this one and us to the wall...and will live to scam the next share owners. The picture is clear now. I'm pissed I didn't see it sooner.
1. Attempt merger
2. Merger denied/held up creating massive frustration--creating "at any cost" obsession when finally approved. No sound business person would have done this deal knowing they couldn't secure proper financing. The only one that would do it would be someone who already was in bed with IBs and was ready to throw shareholders under the bus (Mel K)
3. Finally get merger but already know you can't get "legal" financing due to average credit rating, no positive cash flow, and new major debt of company being leveraged
4. Arrange "only option" deal with IB's to put financing on shareholders backs via convertible bonds and common stock dilution
5. EXPLICITLY understood that IB's will have no choice but to take out common stock, and down to possibly zero, to hedge "financial investment" but do not disclose this to shareholders
6. Create initial dilution to common, revalue shares from 2.29 down to 1.50 overnight--keep deal details hush to shareholders or media
A. Delay official SEC deal filing to public several days--possibly 3 days (3 days is the max by rule)
7. Create strategic media appearances/article releases to create hope and keep shareholders in the game pumping more money into a dying stock
A. SOURCE: SEEKING ALPHA POST;
* bdp
Sep 18 06:42 AM
For what it is worth. I copied this from another news forum:
"There is a rumor traveling around from a very credible source that Mel, who is friends with Donald trump, has met with Trump and two of Trump's creditors and a deal to take care of all outstanding debt in the early part of 2009 is almost finalized. The terms are very easy and since the merger, operating expenses have been smaller than once figured with subscriptions climing actually more rapid than originally expected, stock prices are expected to soar for a while and could easily be in the 4.00 range by the end of 2008. A reverse split has also been tossed around and if emplemented will make this a very attractive stock. Sirius stock is going to be expected to soar as it has bottomed out recently."
8. Make Mad Money appearance and assure shareholders of no reverse and guarantee that the shorts will be beaten
A. Pump up shareholder confidence by saying you are on their side to fight shorts and make the financing right for shareholders.
i. "Mel did say that he has been contacted by the owners of these converts and told of their interest in refinancing them for a better deal. He said that was not in the interest of the company and that they would pay the Feb, 09 debt with a combination of cash on hand and Bank financing, not converts."
B. CEO pretends on the air he doesn't understand the most important deal details (the short of the common) instead letting Cramer call them out on national cable TV. Then blame him for stock price depression
i. Mel Karmazin On Madison And The Merger
Joan Lappin, Gramercy Capital Management 09.04.08, 6:00 PM ET
CNBC's Jim Cramer didn't help the process at all. He was on TV yelling (can you imagine) that you didn't want to own the stock and you should only own the bonds being sold. Of course, the bonds were not available to small investors so that advice was totally useless for most folks. It definitely affected the price of the offering though, and it really jacked up the cost of the money. I also asked Karmazin why he went onto Cramer's show after he had cost both the company and in turn SIRI shareholders so much money. The answer to that query was that they had several meetings with large institutional investors and regarded CNBC as a way to communicate with retail investors.
C. Lie to shareholders and say "ugly financing" was the only way because of quick FCC ruling and staving off of immediate threat of NAB injunction to block merger
i. A. Mel Karmazin On Madison And The Merger
Joan Lappin, Gramercy Capital Management 09.04.08, 6:00 PM ET
Once the FCC finally approved the merger after almost a year and a half of consideration, he had two choices: to close that night or to wait for better financing alternatives than those he was offered at that moment. There were risks to each choice. If he didn't proceed to close as fast as possible, there was the immediate risk that the National Association of Broadcasters would get a court injunction the following morning and throw the deal into the courts for an even more prolonged battle. Some are of the opinion that there was a real risk that XM might go bankrupt under the weight of the debt which the combined companies are now laboring to lighten. If it did file for bankruptcy protection, other possible bidders like Direct TV (nyse: DTV - news - people ) or Comcast (nasdaq: CMCSA - news - people ) who like and understand the subscription media model were likely to surface with the ability to outbid Sirius (nasdaq: SIRI - news - people ). That also would have precluded a combination in the future. In order to close the transaction, Sirius needed to raise enough money to take out the XM debt that was triggered by immediate "change of control" clauses in its indentures. The credit markets are pretty rapacious these days. It doesn't matter if you are trying to refinance your home or an office building or if you are trying to raise capital to complete a merger, as in this case. It really complicates matters in this environment if you don't yet have earnings or positive annualized cash flow. Faced with this set of choices, Karmazin swallowed hard and decided to forge forward. He viewed the "ugly" offering as the better alternative, and he took it.
D. Do not disclose that regular non-dilutive bank financing was never an option due to limited high rates only available to the company
9. Create illusion of solidarity to shareholders by purchasing 2M shares in after hours 9 days after merger deal to keep shareholders in the game
A. But why does CEO buy shares when he knows full well the stock is possibly going to zero because of financing-related short of common and that further 8B share dilution/reverse is planned for Dec. 18?
i. Mel Karmazin On Madison And The Merger
Joan Lappin, Gramercy Capital Management 09.04.08, 6:00 PM ET
Last but not least, I asked Karmazin about his recent purchase of two million additional shares and why he didn't buy more. His employment agreement gives him about a 1.5% interest in the merged company if the options he has been granted become worth something. At present prices, he isn't faring much better than the rest of the shareholders. He had previously put $24 million into open market share purchases at much higher prices and felt that a $30 million exposure on his own money was sufficient incentive for him to make this merger a success.
B. Stock already down .10 from revalue before CEO purchase
C. Purchase in after hours so stock can run up to attract unsuspecting buyers next day
D. Stock loses all pumped value next day and closes right back where it started before after hours purchase
10. Announce "big news coming" after Labor Day to so that it alludes to new financing news to make shareholders whole
11. Disappoint on meek news after Labor Day at conference and shoot mouth off to create more conflict/pressure for stock
12. Continue loose cannon behavior shooting off mouth
13. No communication whatsoever with shareholders about intention to make financing right as said on Cramers show
14. Watch stock drift lower daily over next 4 weeks with no word of concern to shareholders
15. Allow existing IB creditor of Feb '09 debt, GS, to also drop common price target opinion further to .50 (which is also in GS's financial gain to see that price due to common short) and still no word of confidence from CEO
16. Let stock to drift down and close @ .37
17. Drop the bomb and officially release Annual Shareholder Meeting Proxy to public with intentions for approving massive additional 8B shareholder dilution and reverse split in order to restructure convertible due debt, and provide new required short opportunity for the deal
A. A strategy clearly planned from the beginning due to lack of any traditional creditor options--credit which was not only not possible in tough credit environment but not even possible in normal credit environment (this is provable)
18. I now believe something else. Isn't it a strange coincidence (not) that the two main IB's (in addition to UBS as the 3rd who is also part of this deal) that are left standing are GS & MS (who are the two main players in SIRI's convertible deals). Although I guess GS is no longer technically an IB but you get the point. And don't you think that all the IB community higher-ups knew who was in trouble (Leh, Bear, Merrill) and that there was going to be this massive deleveraging, financial crisis and CREDIT FREEZE...and who would survive and who wouldn't? Hmmmm. How interesting (and timely) for SIRI to have the credit freeze and now high rates as a handy excuse for this "change" to doing more dilutive convertibles instead of non-dilutive bank financing? I have to believe a little GS and MS birdie told SIRI this was coming while saying don't worry, they would be left standing to do this new deal. This cannot be a coincidence given everything we have seen. That's how I feel very certain this sheme was all premeditated. You would have a tough time proving it in court however though I'm confident we will see some suits come together. We have to let this play out first though if we are to initiate a suit. I might be up for it at the proper time.
The meeting is in NYC. I hope your starting to get the idea that this is no longer a go Mel go situation. He's f'd up big time here.
Thanks for posting the manifesto. Interesting. I knew immediately as of reading that Shareholder Meeting Proxy that the game had dramatically changed. The manifesto confirms that things were already going bad underneath the surface. My question would be though where was this info right after the merger as an alert to all potential buyers of new shares post-merger? Would have saved many of us money.
I agree with you on Tyler's articles. I have in the past thanked him for bringing articles and providing a place for us to post.
1-0 Sox after 3!
Anyways.....sl62
I know it's in NYC but does anyone know like.... where in NYC yet??
That's why I can't just look at this situation through one set of eyes....
I agree with you guys that a reverse split should not have even been mentioned along with the share offering... but I don't see this price being justified even by manipulators....
All who post here should COPY & PASTE THAT TIMELINE INTO A WORD DOCUMENT so that you do not lose track of it . . . it will be worthwhile to have it for easy future reference.
As to Donald Trump . . . it is certainly true that he and Mel are more than casual aquaintances. Mel owns a place in Trump's building. Although Trump recently purchased a private golf course in New Jersey, his casinos are performing very poorly and are reportedly for sale. Trump publicly stated many months before the current crisis that "the banks aren't lending" and it's tough to get a new project done with "the banks not lending" and then gave the PT Barnum pitch about how spectacular the Manhattan real estate market is.
The point . . . Trump's cash is drying up too; The Manhattan residential real estate market is dead-in-the-water and he's got steel-up on several dead projects, he's tied-up in an ugly eminent domain case in Ireland which is delaying development of a golf course there, his Atlantic City casinos are badly underperfoming and he is in NO POSITION TO LOAN MONEY TO ANYONE including his buddy Mel.
BTW . . . don't forget that "the Donald" came out of bankruptcy smellin like a rose . . I think that was during the Marla Maples years.
(Private note to Mel's screeners: Does Mel prefer Shadow Isle or Due Process . . . does Mel know that Due Process was owned by Bob Brennan? Yeah, you know, the Bob Brennan from First Jersey Securities fame . . . the penny stock swindler now doing time at Fort Dix)
December 18, 2008, at 9:00 a.m., New York City time, in The Auditorium at The Equitable Center, 787 Seventh Avenue, New York, New York 10019
Look. It's so very unfortunate the financial meltdown happened right at this time. Your point is taken that sure, even companies with healthy balance sheets have gotten pounded due to mandatory hedge and mutual unwinding, short pouncing, etc...let's just call it the deepest part of the Bear's jaws. So yes, it's now nearly impossible to discern what exactly is going on with any given stock. Look at CHTR also. Another CDL. Media stocks have been hit hard. Everything really has just been hammered. So OK. Let's see what happens to SIRI now that the fear is lifting a little in the market. I feel like their stock has disconnected from the product for the most part. Meaning do they even have the power anymore to react to positively to good news. Or do they act appropriately to bad news. I wasn't encouraged Friday. That wasn't great news that was released and the stock did nothing--though they did close on an uptick rather than their usual .02 dump. But that may have been NotVerySmart2's 100K block. But eerie silence is a weird sign.
Either way, I plan on being attentive to what I see this coming week. If we don't bounce here off of .36 we will be breeching the 3rd low since the revalue and each time prior it was look out below. So we'll just see it that holds up. I can't see why it won't. Don't forget, just like the broader market, most money managers still use moving averages and low breaks to determine their buying and selling--even in this weird market place. If there is any legitimacy to SIRI's stock at all (other than total mechanical manipulation) and if there are any players still even long--besides us (lol), they are also still using at least these technicals to help make decisions. A breech is a breech. If you take out an important low, it always means you're headed down. I wouldn't use RSI, MacD or BBands though. Those most likely be giving less than accurate indications. Sorry for the tangent. What I'm saying is, the main thing where SIRI is concerned is trouble has been located in the system. Mel has let us down. The dog is not only bloodied and bruised but so are we now. We just have to keep that in mind as we go forward. THE GAME HAS CHANGED.
TO BE HELD ON THURSDAY, DECEMBER 18, 2008
To our Stockholders:
You are cordially invited to attend our Annual Meeting of Stockholders, which will be held on Thursday, December 18, 2008, at 9:00 a.m., New York City time, in The Auditorium at The Equitable Center, 787 Seventh Avenue, New York, New York 10019. The annual meeting is being held to:
1. Elect twelve directors.
2. To approve an amendment to our certificate of incorporation to increase the number of authorized shares of our common stock from 4,500,000,000 to 8,000,000,000 shares.
3. To approve an amendment to our certificate of incorporation to (i) effect a reverse stock split of our common stock by a ratio of not less than one-for-ten and not more than one-for-fifty at any time prior to December 31, 2009, with the exact ratio to be set at a whole number within this range to be determined by our board of directors in its discretion, and (ii) reduce the number of authorized shares of our common stock as set forth in the proxy statement.
4. Ratify the appointment of KPMG LLP as our independent registered public accountants for 2008.
5. Transact any other business that may properly come before the meeting and any adjournments thereof.
Only stockholders of record at the close of business on are entitled to vote at the annual meeting. A list of stockholders entitled to vote will be available for examination for the ten days prior to the annual meeting, between the hours of 9:00 a.m. and 4:00 p.m., New York City time, at our offices at 1221 Avenue of the Americas, 36th Floor, New York, New York 10020.
In accordance with new rules approved by the Securities and Exchange Commission, we sent a Notice of Internet Availability of Proxy Materials on or about , 2008 to certain stockholders of record at the close of business on , 2008. We also provided access to our proxy materials over the Internet beginning on that date. On or about , 2008 we also began delivering the proxy statement and the accompanying proxy card to the remaining stockholders of record. If you received a Notice of Internet Availability of Proxy Materials by mail and did not receive, but would like to receive, a printed copy of our proxy materials, you should follow the instructions for requesting such materials included in the notice or on page one of this proxy statement.
Whether or not you expect to attend in person, we urge you to vote your shares via the Internet, by phone, or by signing, dating, and returning the enclosed proxy card at your earliest convenience. This will ensure the presence of a quorum at the meeting. If you wish to vote your shares by mail, an addressed envelope for which no postage is required if mailed in the United States is enclosed.
Voting over the Internet or by telephone is fast, convenient, and your vote is immediately confirmed and tabulated. Most important, by using the Internet or telephone, you help us reduce postage and proxy tabulation costs. If you received a paper copy of the proxy materials, please do not return the enclosed paper ballot if you are voting over the Internet or by telephone.
If You Plan to Attend
Please note that space limitations make it necessary to limit attendance to stockholders. Admission to the meeting will be on a first-come, first-served basis. Stockholders holding stock in brokerage accounts (“street name” holders) will need to bring a copy of a brokerage statement reflecting stock ownership as of the record date to enter the meeting. Cameras, recording devices and other electronic equipment will not be permitted in the meeting.
By Order of the Board of Directors,
PATRICK L. DONNELLY
Executive Vice President, General Counsel and Secretary
New York, New York
, 2008
Everytime I see that 8B, all those zeros, it gives me the creeps that they would even consider such a thing having no positive cash flow or positve eps...or at all period!! I've never heard of such a thing! and I've been in the market for ten years. Talk about cajones!! They want to flood a possible 8B (an additional 3.5B to an already whopping 4.5B) shares of common stock into this marketplace??? And they want the current shareholders to approve this. Whew.
Sirius Roadkill... like your private notes to screeners. I had been wondering if the company would be trying to follow these boards...or if they were too insular. pompus and delusional to even care. Or I wondered about MM's looking to pick up on buying/selling strategy. Who knows I guess...the manifesto guy seemed to think they were/are watching pretty closely. Hey whatever. There's a fishy smell coming from NYC!!
Location: United States
KPMG International
Timothy P. Flynn became Chairman of KPMG International on October 1, 2007. He was elected Chairman and Chief Executive of KPMG in the U.S. in June 2005.
Tim is dedicated to creating a values-driven culture that helps fulfill KPMG’s ‘Promise of Professionalism’ to our people, our clients and the capital markets our member firms serve. He is a member of the Advisory Committee on the Auditing Profession established by U.S. Secretary of the Treasury Henry M. Paulson, Jr. to make recommendations on fostering a more sustainable auditing profession.
Before becoming International Chairman, Tim served as Global Managing Partner for KPMG’s Audit practice and Global Managing Partner for KPMG’s Human Resources, as well as being a member of KPMG International’s executive team.
Tim started his career in the U.S. firm’s Minneapolis office in 1979 and became a partner in 1988. He was the Midwest Area Partner in Charge of the Manufacturing, Retail and Distribution practice and served as engagement partner on a number of public and venture capital-funded high technology companies. While in the U.S. firm’s High Technology practice, he wrote two books, “Going Public, What the High Technology CEO Needs to Know” and “How to Build a High Technology Business”.
He serves on the Business Roundtable’s Corporate Governance task force, the board of trustees of the Financial Accounting Foundation (FAF) and is a member of FAF’s Audit, Development and Strategic Planning committees. In addition, he is a member of the Governing Board of the Center for Audit Quality, which is affiliated with the American Institute of Certified Public Accountants. Tim is a member of the Committee to Encourage Corporate Philanthropy and serves on the board of trustees for the University of St. Thomas in St. Paul, Minnesota, where he earned his bachelor’s degree in accounting.
He has spoken on leadership, ethics and integrity at a number of colleges and universities including Howard, Fordham, Yale and the Wharton School of Business. He was featured in the May 2007 issue of Financial Executive speaking about changes in the accounting profession and the regulatory and reporting environment.
Marc Fischer
Washington's Loss: XM Empties Out
"It was very important for XM to continue, after the merger, to be headquartered in Washington, D.C. We've even said we won't have less employment here in the District than we already have."-- Sirius XM Radio chief executive Mel Karmazin, June 2007.
Well, probably no one really believed that even when he said it. Federal regulators approved the merger of the nation's two satellite radio companies this summer knowing full well that New York-based Sirius, which was essentially taking over D.C.-based XM, would dismantle XM and search for a path to profitability mainly by cutting costs--XM's costs.
Nobody has announced anything yet, but about 80 Washington-based XM employees, including many of the on-air voices and program directors of the service's most popular music channels, have learned this week that today is their last day of employment. They found out in the worst possible way: One worker routinely signed on to the company's payroll system and saw that his final day of employment was listed as October 15. Word spread like a virus through the building and by the time everyone had checked the system, it was clear that Sirius boss Mel Karmazin was ready with his bloodletting.
There's no word yet on the future of XM's headquarters building at New York and Florida avenues NE in NoMa, but it's hard to imagine that Sirius will hold on to an emptied-out building for long. Karmazin's plan, according to several radio industry news outlets, is to merge XM and Sirius programming into one stream on or around Nov. 5--directly in opposition to Karmazin's repeated and vehement promises to keep the two voices separate and distinct for some time to come.
Gone from XM as of this morning are some of the most popular voices and programs offered by the satellite service, including many of the producers and deejays on XM's highly creative Decades channels, which, unlike anything on Sirius, recreate the sounds of radio stations from the 1940s, 50s, 60s and so on. Also gone, almost all of the staffers on XM's black music channels, including Soul Street chief Bobby Bennett, a Washington legend from his WOL days (perhaps best known in more recent years as the voice of Cavalier men's shops and countless ads for R&B concerts. My profile of Bennett from 1997 is on the jump.)
But a scan of XM's music channels this morning finds most programs proceeding as usual, with deejays making no mention of any changes.
The big move came less than 24 hours after Karmazin made the rounds of media analysts, pushing the idea that Sirius is nearing profitability and is already "one of the top 25 media companies today," even if its stock has collapsed and is trading at 48 cents a share.
Although XM had more subscribers than Sirius and listeners often contended that the Washington-based service offers a better signal and more creative programming--here's my 2006 comparison of the two services, concluding that each is superior in certain areas of programming--Sirius got the upper hand in the years-long negotiations and lobbying that led to government approval of the merger this summer.
For the District, the potential loss of XM would be a rough blow to the emerging cluster of big employers in the NoMa neighborhood. It was XM's decision to build its base in a converted factory that led to the city's push for redevelopment of what had long been a dead zone. After XM and Federal Express moved to the area around Eckington Place, the feds decided to build the Bureau of Alcohol, Tobacco and Firearms headquarters across the street, and Metro went ahead with plans to add a station there. The result has been an explosion of construction, but the softening of the real estate market and the collapse of the credit flow has led to an extended pause in progress, and any possible closing of XM's headquarters would only add to the sense that the boom is over, or at least on a long hiatus, in that part of the District.
More as it happens....
If they do infact increase the # of shares.... i might be tempted to buy a ton at .05 or less!! just before the RS to increase the amount of shares i own..... then dump after a 1-2 day pop after the split.....
That's my plan....
Otherwise im sticking with my shares and not putting any more money into this until stuff is straightened out and facts become clear...
and you know , this company has been giving me bad vibes for a long time ....but I kept hanging in there , and I bought in to the concept .......but I always noticed at any retail store the satrad displays were crappy , and no one was paying attention to them .......I NEVER saw someone standing at the display checking out the siri or xm radios .....NEVER , NOT ONCE .........That always bugged me , but it was too late , I had already bought in , and it was on the way down ......I just kept hoping it would bounce back .......stupid me
The type of debt that they have been exercising, convertible bonds, generate capital but, create incredible dilution of the stock. The convertible arbitrage partnered with the convertible bond also creates a large “short” interest keeping the stock price down.
With the stock price being held down and profits not reached due to the debt, Institutional Investment MM’s are not investing in the company, 14.5% Inst. Inv. This also brings in a large percent,85%, of retail investors whose margin accounts allow their shares to be lent for shorting purposes by their broker dealers.
All of these characteristics composing common share ownership, low Institutional and high Retail, is why the company needs to do something drastic to clean up the mess. A lot of Retail investors with margin accounts creates a Short Seller opportunity to continually be able to locate shares from these margin account holders. The Short side manipulation and the Debt are a ball and chain on the company’s future. They do not want to file Bankruptcy and put operations under the review of the courts. They need to remove the debt convertibles creating common share dilution and remove the large shares outstanding to be able to protect the stock from “short” selling attacks. The credit facilities in May 09 are fine if they can be extended because they do not create dilution and their are no common shares associated.
In 2009 the convertible bond debt, 300 M in Feb. 09, and 400 M in Dec. 09 needs to be paid off. How the management team does this is very important to the common shareholder. We need to push management with letters, calls, e-mails and any other legal manner available to force them to reveal their plan to the shareholders before the shareholder meeting in December. Hold on to your shares and hold on to your right to vote on these issues.
The only other avenue management is exploring at this time is a private equity firm to come in and take us private. Short of that, we have no option but to restructure under chapter 11.
This information has been passed down to us because alot of us employees are scared for the future of our company and are considering leaving the company.
Do we love working there? Sure, but families and mortgages come first. And after what Mel did to the 83 employees of XM in DC last week, don't think for a second that he cares about anyone other than himself and his buddies that keep getting bonuses while the stock keeps tanking and the profits elude us.
As for FM5, there is debate if we will launch the bird next year as it is not paid for yet.
By the way you make no sense it seems hard for me to believe in the middle of SIRIXM letting 80 people go which you all would have known was coming after the merger (what else did you think senergies ment). That there would be others basically holding signs up take me first, because I am thinking of leaving anyway.
That's what i've been thinking of about the dilution...
I was just wondering if I should risk picking up a bunch of shares after the diluted price.....If it happens before a RS.?.?.?.?
(In cos and gekko's case the dilution would happen after the RS)
Any thoughts about my dilema?
Thank goodness John Malone took over DirecTV and re-inked a Tivo deal.
Basically, they just stopped paying the employees and they found out by logging into the payroll website that Oct 15th was listed as their last day. This happened to 83 employees after they did the same thing to another group of 50.
As for the company being ok with losing employees, sure for most they would most likely be happy they didn't have to axe them and be the bas guys them selves, but the engineering staff isn't exactly a group you can just up and replace.
And I know it will be most of next year before we are delisted, as I said, just enough time to convert ALL the debt next year into common stock..
You can go read the SEC document yourself, if they weren't going to do it, they wouldn't be looking for approval just to have "another tool in the toolbox" be serious. Mel isn't saying anything because HE HAS NOTHING TO SAY!
I just want to say thanks for your posts. Believe me, I believe you. I'm sorry I missed your posts from Sept 30. I don't know how I missed them but I guess I did. The stock price is about .20 lower today then at that time--which isn't the end of the world...even at .50 is was in the toilet. I'm more glad that I didn't miss your post had you done so when the stock was @ 1.26 (when you tried to short-and yes, shorting under $5 for us peon investors is non-marginable for brokers so no go), although I now wish you would have posted your Sept 30 info then. No matter, your info whenever it has been posted is appreciated and invaluable. It confirms exactly what we have finally learned (through facts) this past weekend...that Mel and Co. are evil. As you may have read previous, many here truely believed he and the company were on the side of the shareholder. Not to be.
I kept a little bit of money I was putting on the side, but when i did I wasn't expecting the price to have a chance of being diluted....
So I kept my money on the side.... (It was money I was going to spend on it anyways... just now I think I will wait to see if the dilution occurs... Then I will at least get the most bang for my buck LoL!)
Otherwise, I do agree with you that Mel does still care about his Rep. and about what you said about him taking less money to come here... I still belive that what Mel has planned is for the best for the company in the current situation...
I have not turned YET on Mel.....!
I want to repost Srius_Employee's posts from Sept 30 and I urge all to please re-read his posts from this morning just up the page from here. IMHO, if you go forward from here with a blind eye and think everything will just be OK, or Mel is cool, without your extreme attention from here on in, you will have no one to blame but yourselves in the end! This has devolved into a madman's game. Wherever Mel came from or how much money he's made in his career is now irrelevant. It's more about where he's headed that's key--which could be to prison. I am going to begin with a few of today's posts because they are probably the most relevant and reconfirms what I and others were writing about all weekend. As shareholders with the price @.38 even as we speak , we are now in a very tough spot. Mel has orchestrated this tough spot for us. Now we must make the hard choices of either to stay in until before the meeting and hope for (I hate that word hope becaue it's not really a strategy) a short cover pop back to maybe .50 -.60 ( I see no higher)--and risk this price being at potentally .15 - .20 at meeting time...or do we exit now and preserve whatevers left, move on and start working with other stocks to make some money back elsewhere by meeting time (12/18). I have to think anyone owning stock from a cetain time premerger to now (release of Proxy) would be eligible for a class action suit to recover losses. We've walked right into the company's trap and are hard pressed to decide what to do.
p.s. cos1000...you're mentioned in these posts and of course no offense to you at all. You know your views and opinions are respected and valued. I just copied in entirety...and sorry about the BoSox...
Post 1
Srius_Employee
BTW: Standard disclaimer: I have no position in Sirius stock. I refuse to open my 401k there because the match is only in company stock that I view as worthless. I DID try to short the stock at $1.26, but my broker won't let me short any penny stocks (under 5 rule)
Post 2
Srius_Employee
>>>ON: Mon Oct 20th 09:29 AM
Commented on:
Will Murdoch Make a Move on Sirius?
Cos1000: heres the deal. We can't get the Feb debt refied AT ALL, no less on favorable terms, so the board wants to double the number of shares of common to convert the debt. After the convert, we will do the reverse split so as to comply with the listing rules on the NASDAQ. There has been a temp hold on the NASDAQ delisting procedure due to current market problems (check the NASDAQ site), so this is our window to convert the debt into common stock before the RS, and not get delisted.
The only other avenue management is exploring at this time is a private equity firm to come in and take us private. Short of that, we have no option but to restructure under chapter 11.
This information has been passed down to us because alot of us employees are scared for the future of our company and are considering leaving the company.
Do we love working there? Sure, but families and mortgages come first. And after what Mel did to the 83 employees of XM in DC last week, don't think for a second that he cares about anyone other than himself and his buddies that keep getting bonuses while the stock keeps tanking and the profits elude us.<<<
Post 3
Srius_Employee
The issue isn't Sirius letting people go, ofcourse we all expected that, it was the WAY in which they were let go. Read the article about it in the Washington Post.
Basically, they just stopped paying the employees and they found out by logging into the payroll website that Oct 15th was listed as their last day. This happened to 83 employees after they did the same thing to another group of 50.
As for the company being ok with losing employees, sure for most they would most likely be happy they didn't have to axe them and be the bas guys them selves, but the engineering staff isn't exactly a group you can just up and replace.
And I know it will be most of next year before we are delisted, as I said, just enough time to convert ALL the debt next year into common stock..
You can go read the SEC document yourself, if they weren't going to do it, they wouldn't be looking for approval just to have "another tool in the toolbox" be serious. Mel isn't saying anything because HE HAS NOTHING TO SAY!
Post 4
Srius_Employee
ON: Tue Sep 30th 13:28 PM
Commented on:
Is Sirius XM a Buy, Sell or Hold?
>I know exactly how much debt this company has,
Really? Try 4.1B in total debt (bonds and contracts with SSL)
>and reducing redundant and non performing >channels to make room for Best of Both, new >revenue, is just smart business.
Are you serious? When I scroll through my Sirius receiver, I don't have "redundant" channels. Maybe I would with a combined receiver and a subscription to both services; but with existing equipment, I get standard existing channels that I have been paying $12 a month for.
Now enter best of both. My house radio, nor the 2 cars have a combined receiver, so I get what I get on them. In order to get best of both on my Sirius receiver, some of the channels I have been getting for $12 a month for are going to have to go away. If I continue paying $12 a month, I will get less channels than I do today. If I pay another fee for best of both, I end up with the same total number of channels that I have today. The receivers are only capable of receiving a total amt of bandwidth. You want the option to add channels, you need to take away from the existing to make room.
>WaMu and Wachovia are not in the same industry so >wipe the "spiddle" from your chin and move on.
You're right, they are not, but what they did have going for them was they actually made a profit a one point in their exsistance and as such gave investors more of a reason to believe they would repay their debt.
You are so bullish, so tell us, how much MONEY have you made off this stock since you started buying it? Last I checked, no one but the founder of the co made money and that was only because he tossed his stock shortly after going public and jumping to $60 a share.
Post 5
Srius_Employee
ON: Tue Sep 30th 01:37 AM
Commented on:
Is Sirius XM a Buy, Sell or Hold?
I really hate to say this, but from as an insider looking at the stock as an outsider, its going to $0.00 unless the shareholders rail against our terrible CEO. Our stock is at $1.26 and he has the nerve of going on Mad Money and saying "We've done everything right, its the stock market that has us wrong." I learned a long time ago, when a CEO makes excuses like that, they are lost and you best expect a HUGE loss.
So what are the BIG BIG negatives other than the debt thats killing us?
1: A new $400 million dollar satellite is set to launch next fall (FM5) that is INCAPABLE of handling both Sirius and XM frequencies. The combined company is looking at a total of 9 satellites to broadcast the bandwidth of just 2. Oh, and lets not forget there is no launch insurance on this bird, nor for the ones already in orbit (other than the 2 failed XM birds that kept their insurance for obvious reasons.)
Or the debt both companies have with SSL for the satellites that is not included in the financial report as debt. (XM still owes $400m on XM4 in a lease-buyback program) Confusing on the details, but if the bird fails XM is on the hook for the $400m on the spot.
Large numbers of subscribers have been canceling their accounts in the past 2 months, all the while the company is claiming to add another 1m subscribers by the end of this year and another 1m next year? Subscriber count will either be sideways, or possibly DOWN, not up. Doubt me? Go-to Best Buy and ask about the services. Most employees will tell you to wait for the combined receiver.
What they have not said about the "Best of Both" programming that is supposedly able to work on existing receivers? In order for that to be the case both divisions need to reduce the channel count for "their" channels to make room so you can "add" the others best channels. The end result? Unless you pay the extra $$ for the combined plans, you will have FEWER channels available at the current price point. (This does not take into account the loss of channels as mandated by the FCC)
I think Cos1000 needs to take a better look at Siri and XM's last quarterly reports and get a better understanding on the total amount of debt the combined companies are carrying. As for why the bond bullies would want to convert, or not renew the bond? The Company only has enough money to pay down the interest (330m / year) and NOTHING on the principal, all the while the debt has been slowly growing over-time.
Would you seriously lend your cash to a company with a debt rating the same at WaMu's before they went to zero, with no profits EVER to pay it off? If so, I guess you must be a lender from WaMu or Wachovia.
1. My apologies to you and your beliefs. You were right. I'm man enough to admit when I was wrong. I still adhere to that I don't know how you knew but I can't believe it was on anything factual (such as what Srius_Employee provided) but maybe you just knew on a gut feeling. There were plenty of facts available to the long side of this to indicate a positive outcome to this (which were articulated by intelligent people). Obviously there was no way for anyone to know about the contents of the Proxy, which became the deathnell of the whole glass-half full picture. Not only now is the glass not half empty, it's empty. But...
2. Point two in my opinion is the most important to the big picture. Many of us longs were basing our opinions on facts, numbers, history, tangible things. You contrarians were expressing your opinions without facts, numbers or anything. Usually it was just one liners like "stock is going to 0" or "you guys are idiots to stay in this company" or "bankruptcy!". I have to say right here. That's not the way to articulate an opinion that may actually be able to help someone change their view. So given that, it became clear that you were here more to gloat and rub salt in the wounds and kick people when they were down for your own amusement. Which obviously doesn't present a picture that you were sincere at all in in trying to HELP anyone here. Maybe that's something you should consider as you move forward in further forums. Investors have trouble enough making gains by themselves, these forums should be about helping one another through facts and belief, but the facts are important. We asked several times for anyone to step up with some contrarian solid facts, articles, whatever, and no one ever did.
No prob on the post earlier, just trying to help navigate this brave new world through information. I agree with you that if Mel were to stand up THIS WEEK, TODAY, TOMORROW preferrably and explain himself and the Proxy, that would help matters some. However, I have little faith he will. Look at how he is laying of DC XM employees...without a word. I wonder why though you would expect him to stand up and be counted now, when he hasn't until now? Instead all he has ever done since August is shoot his mouth of in public and blame everyone but himself rather than talk to his shareholders...IMHO
I am in a bit of a pickle and time is running out quick...
I think what troubles me the most is that I can't believe Mel would do this and I can't really trust anyone else's OPINION about this situation....
How do I know Sirius Employee (I mean no offense when I say this) is actually an employee and knows this information he speaks....?
The statements and articles you guys have brought up are not based on numbers or anything.... They are based on hunches and feelings that are already magnified by the fact we all lost so much money....
It seems like every article and seemingly innocent news strip that comes out you guys are starting to become paranoid about and exaggerate news...
Don't forget that besides the SEC filing, The news reports have been bashing this stock to smithereens, now with the filing... they are ripping into new flesh!!
I can't shake my hunch that Mel has not turned his back at us...
I will however addmit defeat when it is proven to me by FACTS!
Believe me i'm SCARED to say this but
----------------------... SIRI--------------------------------------
What is your opinion on what the Q3 numbers will look like? Thanks.
There are many who share your concerns about management . . . please consider contacting Michael Hartleib at 714-927-5898 or by email at savesirius@gmail.com
Your identity will be protected.
I'm glad you are starting to embrace the fact that something could be wrong in Bangkok. None of us supporters wanted to go to this place of doubt but now I'm feeling like more of an athletic supporter than anything (lol). But I have to refute your comment of lack of facts. I think there are plenty of facts on the table and recent posts are not just hunches. Mels litany of rogue public comments are facts. Mels lies are facts. The Proxy is a fact. The ever sinking stock price is a fact. Laying off DC employess without a word to them is a fact. Closing the DC XM altogether when Mel said he wouldn't pre merger is a near fact. Srius_Employee I do believe as a fact including all the facts he's provided regarding bird debt, no insurance etc...You have to remember now that Mel has pulled this DC debacle, EVERY SIRI employee has to be sh%tting in their pants because they have familes, mortgages etc. I totally believe Mel has not been communicating with them--he hasn't been communicating with us! Another fact. If you look at all Srius_Employee's posts (only 5 btw...it's not like he's ben here ragging on people like others), I take him at his word becuae he fits into the picture. The facts also state that Mel never inteneded on doing bank loans as he said HIMSELF he could only get LIBOR +6 or 7--his own words last Tuesday. Without looking at a chart, I just heard on CNBC this morning that normal for Libor would be 2.8 or 3. So that means (as Srius_Employee confirmed) he never could get a loan for under 9 or 10% and that's not happning (that is also a fact). It would kill the company. Oh and that manifesto that was posted is a FACT. If you want to check it use that email address and contact that guy. I intend to. People have already been at work preparing lawsuits against the company for malfeasance. Both legally and some illegally to profit. People know this thing is going to go down in flames. We just don't know the timeframe. Sadly we're in the unenviable position right now of HAVING to pick a bottom and a short cover rally (and the strength of it). Good luck to us!! How can you further believe in a company long term that is UNABLE PERIOD to secure another bank loan and can only use common stock dilution to fund their debt? Thats funny money. The only way out I see for this company is Chapter 11 (or 13) depending. And I now believe this was Mels instrument of choice knowing full well that we were headed into a financial meltdowm. Don't forget, he has been in bed with GS and MS. You don't think they didn't tell him some heavy sh%t was going to go down this fall? So you have to ask yourself. If you know you can't borrow any more money from a bank up front, yet you still intend on going ahead with a massive debt incurring merger and fund the merger with stock dilution while mandating a futher mandatory stock depression (due to the bond short) (which could take your stock to 0 if desired), and you know a financial meltdown is coming which will help your case for eventually filing BK (without ostensibly too many questions), then you do the final blow to the stock by announcing a massive flood of more dilutive stock, with a reverse to boot, then there you have it. I am 95% sure the master plan of this whole thing was to take the merged company into bankruptcy by the end of this year. Don't forget in a BK the bondholders are always satisfied first, then comes everyone else and stockholders are last. This is so clear to me considering all the FACTS now coming to light. One other fact that I overlooked before which now has relevance. In the history side of this, we know SIRI went through a low stock price in 02 - 03. Their low then was .38 intraday. Becauses I always believed in Mel I never looked at this FACT:
"Karmazin accepted the top job at Sirius in November 2004."
The sad fact here is that Howard had already jacked the SIRI stock to 6.00 by November 2004. The news of Mel joining the company is what kicked the stock to its post techbubble high of 9.50 (approx)...probably in early Dec of that year. From then on it was down to here today. So the takeaway here is a few fold.
1. Mel never navigated the company though the lean years. Had his big mouth been around then, maybe the company never would have made it.
2. Since Mel joined the company, the stock has gone from its high, all the way down here. That's on his watch. So there you go. More facts.
I have no idea what to do at the moment. I want to just sell it all and be done with it and if something happens and the thing turns around I can jump back in. As of now I've sold nothing. Today is good because we're flat (sad that now you have to be excited about flat!). So I'm just doing more thinking today.
I agree that Sirius's balance sheet is in trouble. I agree the markets are in trouble. But Sirius/XM together have a market cap of way less than both seperate. I refuse to believe that is possible so long after the merger. Either both stocks were heavily overpriced before the merger(they were way down at the time) or the price now is undervalued. Their debt is substantial. Their revenue handles it. Can they ever get debt free without more stock dilution? Sure. Companies run with debt 100 percent of their existance. No big deal. Do they make more than they pay out? Almost. Thats why the stock is undervalued right now.
I have an excellent ability to read through lies from posters. What I dont have an excellent ability at is knowing where market manipulations are going short to medium term. I know where this company will be in 5 years. Powerful, large, and the thing to have. Will they be debt free, probably not, but no where near these levels. Will they be making money? Yes. Will they be making a lot of money? Maybe. If they can get to a magic number of say 24 million subs, and increase ad revenue just 10 percent, and lower talent costs only 10 percent, they have the ability to make a lot of money. Are the above goals reachable? Yes, and I think that is conservative. SHould we wait? That is the question. The market conditions are the worst in history. Credit conditions are the worst in history. There has never been so much negative energy about this stock in its existance. It is controlled by shorting interests.
HMMMMM. What to do what to do. Our CEO is playing chicken with your money, and being about as helpful as the NAB towards our interests. I wrote it off as a low SP gives Sirius power. It shows no futher dilution would be possible to investors. Stock isnt worth anything. RS? That changes a few things. Adding Shares? Someone wants them? That cant be true. Who? Give me their names. Id talk some sense into them. LOL.......
SL62, me and C0s1000 have done a 180 on this for good reason. The proxy reveals they lied to us. Not only are they considering it, it seems inevitable given no facts to the shareholders for us to think otherwise.
So as Ive said before, unless they SHOW us that there are NO other options other than bankrupcy, even then Im not for it. Id rather let them go to bankrupcy, which is the reason I dont believe the sirius employee, or that he was lied too. They are using the low SP and the threat of bankrupcy to railroad this through. Im not buying it. SOrry Mel, your a lyer and work for someone else, not the stockholder. When and if i see you at the meeting, I willask you who you really work for. And if you like jail.
Notes of interest...
As I have been saying all along, Sirius is now under control of the PTB. The banks. The CFR, the Roschilds, etc.. Whatever conspricacy your believe, the Maria Shriver thing adds fuel. Shes a Kennedy, and part of the ruling families. This company is so IN, it makes me shake to know they want my shares so bad, the board might be willing to risk jail to do it. Freaks me out they are that ballsy. Very very scary.
Just something to consider regarding the consolidation. IMO, what speaks more about the downsize is HOW you do it, not so much that you are doing it. It's one thing to begin downsizing (which was fortold, OK fine) but look at how it's happening. How would you like it if you worked for either company, you have a family and mortgages, etc.. and your CEO is telling you nothing about who is going and who isn't? Esp. by now!!! The merger was 3 months ago!!!! Where is the plan for all to see in phases or waves or increments? There are people right now today, still going to work in DC XM, who have not been told they are terminated, yet their pay has been cancelled beyond a certain point. What? I ask, where is the management? Is this what you call good management? How would you like it if that happened to you? Why do we hear about 8B shares and a reverse split (and plenty of publicly running off at the mouth) before we see ANYTHING about the consolidation plans??
And...you can't secure a proper bank loan period and you are doing everything right? Mel has hidden things and misled us and that's all there is to it. He's doing the same things to his employees. IMHO.
Agreed but I believe Srius_Employee. Mel is making enemies faster than you can think of. As I just posted, look at the long-term chart. He joined in late 2004 at the stock high and has crashed it under his watch. This is the proof how badly he has mismanaged the company. Doing this il-advised merger was the last straw. I now tink he did it TO get the company into BK reorg. That way he can emerge out of it like Kmart did--smelling like a rose with no debt and 20+M subs and like you say a very good product still with deals with OEMS etc...a built in rev stream guaranteeing positive cash instantly without the debt. IT'S VERY IMPORTANT to realize that he lied about being able to do a bank loan. He implicated himself last Tuesday by shooting his mouth off by saying he can only get LIBOR +6 or 7%. Even at normal LIBOR of 2.8/3, that would be 9 or 10 (in good times). So thisi whole financial meltdown is just a smoke screen. He ABSOLUTELY KNEW BEFORE THE MERGER that he couldn't do any bank loans. So he knew he was going to smoke the shareholders and I think just drive it right down into BK. Why NOT? I belive Srius_Employee saying the bird debt is massive, uninsured and not reported to the bottom line. Mel knew this also. It's just becoming so clear what his plan was to take this company into reorg to shake all the debt. There are too many signs to ignore IMO. He knew there would be shareholder revolt. That's why he's done this. HE WANTS THE REVOLT. Anyone going to the meeting willbe playing right into his hand (if the company even makes it until then). He might yet use the shareholder revolt to say "because we now think we will not have enough votes to pass this stock dilution, we have no choice but to file for bankruptcy--effective immediately." This to me a very real scenario before the meeting and in it, there will be no warning. It will be released some morning, like Fannie, Freddie, Leh. Bear etc.. and the stock price will open at .05. We have to be wary of this possibility. I no longer will put the worst scenario past Mel K.
Also regarding the meeting (if it gets that far). It is written in the Proxy that seating is limited (as it always is, any place is only so big) so many who try to attend won't get in. Many will be relegated to standing outside the hall yelling epithets most likely. I wouldn't put it past SIRI to already have the hall filled with "the right people" and so will start turning people away VERY EARLY in the AM.
Also, I suggest we wait until some of these actions come to fruition before bringing the suit. There are going to be massive suits IMO--which again is anothe thing that will dog any stock of theirs, reversed or not next year.
Man, the hits keep coming!!
www.tradingmarkets.com.../
A little contingency planning . . . the articles posted here are reprinted, with permission, from the Siriusbuzz website. In the event that something unexpected happens and the Siriusbuzz website shuts down we will have lost our conduit for this forum; we need a back-up plan now . .
If anyone has "IT" knowledge and can set-up a no-frills site now as a back-up, please do so or, alternatively, recommend a place to reconvene this forum with our current identities. The continued communications flow is critical.
I also urge everyone to copy & paste any important posts, such as the sl62 Timeline, into a Word document for safe-keeping and future reference. Perhaps someone here will volunteer as a recording secretary to secure any of the important posts and act as librarian.
Please reply with suggestions for a back-up forum . . .
Relmor, can't hurt to hear what Hartleib has to say . . . he has already done much of the heavy-lifting