Sirius XM Radio Faces Shareholder Suit 36 comments
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It looks as if another step has been taken in what has been a long process for shareholder Michael Hartlieb. Mr. Hartlieb has formed an organization called “Save Sirius (SIRI)”, and has now filed a suit in U.S. District Court in Los Angeles. The suit accuses management of violating the federal Racketeering-Influenced and Corrupt Organizations act, breach of fiduciary duty, and violation of the Sherman Act.
Mr. Hartlieb has been vocal on various situations with regard to Sirius, XM, and the merger for a few years now, and up until recently has been acting on his own with regard to his various concerns. Now, it appears that he has formed an organization of about 500 shareholders that have joined him in his efforts.
According to a press release issued Monday, which this publication had no prior knowledge of, the current effort is to stop a potential vote at the Sirius XM annual meeting to be held December 18th, on increasing the fully diluted share count to 8 billion, as well on a vote regarding a potential reverse split.
In a statement from the press release, Michael Hartlieb said, “We are working to gain control of our company by seeking to remove current members of the board as well as top executive Mel Karmazin.”
The press release, as well as the lawsuit, outline what can only be termed as some serious accusations. This publication has seen no “smoking gun” that directly ties the company to certain activities listed in the complaint. There are indeed a lot of circumstantial points that could be theorized about, but whether the theory translates to reality, or can be proven, is another matter altogether.
Some of what is alleged as a breach of fiduciary duty simply boils down to a matter of debate.
Save Sirius complains about Sirius XM’s “history of locking their shareholders into the longest merger delay in history,” as well as its “preventing the corporation from seeking alternatives or potential suitors.” The flip side of the argument is that there was no way to know that the merger would become as long and drawn out as it did, and that the best situation would be for a merger of all of the spectrum (between Sirius and XM), rather than one company being absorbed into a mega company such as Google (GOOG).
Fiduciary duties are a huge responsibility, and any company can only act on what it knows at any given point in time. What transpired in the markets over the past few months was likely beyond what almost anyone would have imagined. Personally, the company going private at low level prices such as we currently have is a large concern of mine. There are shareholders who would be hurt by this happening, but there are also shareholders who would benefit. The question is which group is larger, and that is an unknown right now.
My opinion on this matter (and let me be clear that I am not a financial or legal advisor), is that there is not enough concrete evidence to allow some aspects of this suit to ultimately be successful. While the share price is frustrating, and it is easy to look back in hindsight to see that differing actions may have gotten better results, neither will be a smoking gun.
There were a lot of moving parts in trying to get the merger approved, and the financial markets had wildcards that would have been very difficult to predict. Was there a point in time when it may have been better to walk away from the merger? That is a matter of debate. The impact of a failed merger would have had its own implications, and certainly there would have been people that questioned the move.
We have not seen the Q3 results as yet, and these will be the first financial results of the merged company that will be made public. Taking a stance on whether the company has breached financial duties without seeing the financial position of the company is a difficult leap for me to take.
What if the numbers are released, and many of the synergies Mel has spoken of are coming to fruition?
What if the recent debt buyouts are a precursor to a very good refinancing of the February debt?
What if the increased float and reverse split options only exist because it is required to satisfy NASDAQ’s requirements (if needed), and the company wants to vote on it now rather than spend additional money to bring about a special vote later on?
What if the company puts out a better third quarter than anyone anticipated, and the market reacts positively?
Simply stated, there are too many what ifs out there at this point for me to participate in an action such as that being brought about by Save Sirius. This is not to say that Save Sirius is right or wrong. It is merely my own opinion. Yes, shareholders have every right to be nervous and concerned. The equity has taken a beating, and many who have been in this equity for a long time have yet to see the reward for their belief in the concept of satellite radio.
Investors need to look at issues from as many angles as possible. They need to determine how comfortable they are under many circumstances, and be prepared for events that many simply never imagined.
The bottom line is that Sirius XM Radio as well as shareholders are all in a difficult situation, and trying times.
Position - Long SIRI - This site had no prior knowledge of the press release or that the suit would be filed Monday. The author of this article is not a part of Save Sirius, nor a participant in the actions of Save Sirius.
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This article has 36 comments:
#1. someone could start a sirius fund, for shareholders, subs, or anyone who would like to donate.
#2. any shareholder who is interested in saving their stock, should run out and buy a subscription and pay the $13 a month( if they're not a sub yet, of course).
#3. Any sub that is a shareholder could purchase a second radio for $40 and add the second sub for $7 a month.
Any one of these options would go a long way in helping them survive over the next 6-12 months, and hopefully the air will clear and money will flow again to co's such as siri. Hey, it's probably a lot cheaper to do this than file a lawsuit, why doesn't Mr. Hartlieb get as many shareholders to do the above if he's really interested in saving sirius, just what sirius needs now, another headache to deal with, didn't they have enough pain in dealing with the FCC, comon give them a break all ready. Concerned Shareholder/Sub
Given Management's History of:
--Locking the company into the longest merger delay in history;
Given that this is their first and only merger attempt, I don't see how one can say that they have a history of this. The DOJ and the FCC had something to do with this. Did the company hold back information requested from these government agencies so they could not proceed? What about all of the "Entities" that filed complaints and objections during this process, including Michael Harleib, didn't they cause some delay to the process?
--Preventing the Corporation from seeking alternatives or potential suitors;
What direct evidence is there or has been presented that Mel has not and the Board has not looked at every option, "beneficial" to shareholders in operating the company? Conspiracy theories without direct evidence?
--Their insistence on going forward with the merger at any and all costs.
This may be true but does not necessarily represent neglect of fiduciary responsibility. Not wanting to give Spectrum up to a competitor does not show lack of sound and responsible management. Eliminating you only competition in the Sat Rad industry might be considered by most shareholders as responsible management.
--Consummating the merger issuing 300 million shares to the financiers of
XM's debt to be sold short on the open market.
This financing "Enhancement" to the convertible bond issue to keep XM from defaulting, has been the most damaging to the stock price and can be debated that is showed a lack of due diligence on the part of Sirius' management. Maybe a lawsuit should be filed against XM's management and its premerger B of D, for their lack of full disclosure relating to this debt and its refinancing status. This is the single most important issue filed requiring investigation and further disclosure by the company as to who new what and when. IMHO
Now the question is: How does this group of shareholders led by a shareholder, with a history of filing legal actions against the company, advance their agenda in the best Interest of all shareholders without doing further damage to the company and existing shareholder value? The claim by Save Sirius is that members of the B of D and Mel Karmazin have lost sight of their obligations to shareholders and have breached and will continue breach their fiduciary responsibilities. This lawsuit is being filed before the company has provided even its first quarterly report since the merger, and has not yet operated a merged company for a full quarter. We shall see whose interests are being best served with this legal filing........
What a waste of time, money, company resources, the courts, etc. These people are the worst sort of vultures.
This suit goes nowhere, period. It eats up company resources exactly when they are needed most urgently. It is aimed only at getting a settlement for the TTT-grad, strike suit lawyers who prey on disappointed shareholders because they couldn't get real jobs.
Managers have a duty of loyalty and a duty of care. No court is going to find a breach of the duty of loyalty, period. It just doesn't happen absent extraoardinary facts, like selling off assets to family members at deep discounts or other such blatant self-dealing. No court is going to find a breach of duty of care, either. That is an extremely low bar, basically if they show up for work and appear to have a slight interest in the day-to-day running of the company, they meet that duty.
This is complete idiocy.
Come on you guys. Know one here really believes Sirius management is just a dictum of circumstances. Know one here believes it. But, some here keep the optimism. I fail to understand the constant Sirius optimism on this board.
Does Sirius really pay some of you to post propaganda here? I am beginning to believe that we really do have Sirius goons working here. What eve Mel is paying you guys, it is NOT enough money!
Mel is a crook. Sirius Management are all crooks.
Know one is listening to the puke being spread here anymore. We all know Sirius is a scam.
Stop the Rev Stock Split.
All this optimism on Sirius from day traders. You guys all sold your shares. Your day trading. You did not have guts to stay in Sirius. But you want to tell us heavy longs how to take it and shut up so you can day trade more.
Let us real investors of Sirius fight to save this company. You guys can go day trade some other stock. Real investors in Sirius have serious work to do. After the lawyers get all our money and Sirius is saved from the crooks you can come back and tell us how to invest…
Stop the Rev Stock Split.
For you to add criticism to anyone opposing your lawsuit on this "shareholder groups" behalf as propaganda is completely absurd. I have read all of your propaganda for the last several weeks regarding your paranoid conspiracy theories, cutting and pasting M. Hartlieb's filings and ramblings as though they were fact, and have not complained until now. Now your support for this BS is jeopardizing the value of this company and the potential for this management team to grow the company and enrich its shareholders. First you lose your money in a bad investment and then you waste your money and now the company's in chasing ghosts. All because you are pissed about losing money in YOUR investment. I am not paid by Sirius or anyone else to post my opinions here and am in total agreement with Blah, blah, et cetera.
Markbmark...
where were you with all of your Sirius work to be done during the merger process, when the stock was at 2.70, 1.80, 1.50 and beyond. I was invested in this stock and have lost a lot of money. I am trying to recoup some of those losses, my right. I will trade in and out of this stock until I get some of my money back if it suits me to do so. You can take your self righteous BS about "Guts and Glory" and shove it where the "Sun Don't Shine" for all I care. You are a follower who has come out of the dark in the last two months to tells us who have been here how your looking out for our interests. That is just plain BS.
However, as was said by a few people yesterday, “Many people come here looking for good advice and insight on Sirius.” Yet, many who post here have been way to optimistic on Sirius and it was bad advice. Now, I see bad advice on the lawsuit spewing about bad for the company.
The company is the problem. But day traders don’t care about “the company”. You’re in trading mode. You could give a dog about the company. Why do you fight people who want to kick Sirius management out to make it a better company?
As a day trader you do not have the wright to advise long investors on how to make Sirius act in good faith for the share holders. You’re in trading mode! So, go day trade and let us try to fix the real problem with Sirius.
If we listened to people on this board, Sirius will be stolen on the cheap and go private by end of 2009. You speak of evidence and proof. Well, if you don’t want to believe or you want to prevent others from believing, NO THING WILL CONVENCE YOU. I could show you a “copper penny” and you would call it “tin”. You don’t believe what you don’t want to believe.
This propaganda how the lawsuit is bad is just plain wrong! I have seen the proof of very bad wrong doings. Mel can not be trusted. Real investors in Sirius MUST seek protection. PROTECTION is what the lawsuit is about.
Bottom line, If your not heavy long and want to turn Sirius into a profitable company, you need to stay out of the law suit talk.
VOTE NO REV STOCK SPLIT
You are trying to convince people that that piece of tin is a copper penny. You are trying to say because it is the same size of a penny it must be a penny. The fact is we dont just close our eyes and trust what Mike H. puts in our hand is a penny (buy the way Mike also has his eyes closed in this story).
---We don't agree on this issue---.... is one of the most profound understatements I have heard in a long time. You are about as wrong as wrong can be about my care and concern for this company, sir. You are so full of your own propaganda that you have not been able to hear the cautions that many have stated here over the last few months, including mine. Anyone coming here for advice has gotten nothing but a fair assessment of the company's ability to perform and the potential that it still has in the future.
You and your consortium of disgruntled investors and misfits, want me and others to turn this company over to you..... I think not.. You are a fool and have been duped by a crowd of whiners who are further wasting your money.
Leaving this company's future in the hands of idiots like you and M Hartlieb is something that I will not do.... So why don't you take your BS lawsuit and try and recruit other ignorant investors, too lazy to do their own research, and pissed off because there wasn't any EASY money here after the merge, to your =Poor Me= party and leave the rest of us out of it.....
Great comment as always............
LOS ANGELES, Nov. 3 /PRNewswire/ -- The following is being issued by
"Save Sirius":
A group of incensed shareholders, over 500 strong and growing, have
banned together and accused SIRIUS XM management of unjustly enriching
themselves at the expense of shareholders.
A derivative suit on behalf of shareholders has been filed in the
United States District Court, Central District of California, Southern
Division. Case number SACV08-00790CJC
The case accuses management of violations of the FEDERAL RACKETEER
INFLUENCED AND CORRUPT ORGANIZATIONS ACT (RICO), BREACH OF THE FIDUCIARY
DUTY AND THE SHERMAN ACT.
This suit seeks to prevent management from further damaging its
shareholders with massive amounts of additional dilution (8 billion shares
in the fully diluted float) and as much as a 1 for 50 reverse stock split.
"We are working to gain control of our company by seeking to remove
current members of the board as well as top executive Mel Karmazin," said
Michael Hartleib on behalf of Save Sirius and its members. In a September
15th 2008 Wall Street Journal article written by Sarah McBride, she states,
"Given Sirius XM's low stock price, Mr. Karmazin said he would love to take
the company private. But given the state of the credit markets, 'How do you
find [the money] today?' If the company were generating positive cash flow,
which he expects it to do for the full year in 2009, privatization would
become much more feasible, he says."
It is clear that management under Mr. Karmazin's leadership has an
agenda to steal this company from its shareholders.
Given Management's history of:
-- Locking their shareholders into the longest merger delay in history;
-- Preventing the Corporation from seeking alternatives or potential
suitors;
-- Failing to commercially introduce interoperable radios;
-- Their insistence on going forward with the merger at any and all costs;
-- Consummating the merger issuing 300 million shares to the financiers of
XM's debt to be sold short on the open market
Mr. Karmazin and the board have severely damaged shareholder value in
violation of their fiduciary duties. Shareholders have lost over 90% of
their value under Mr. Karmazin's leadership.
"In light of the aforementioned, it is clear that they have lost sight
of their obligations to shareholders and have breached and will continue to
breach their fiduciary duties in the future. We, as a group, will not stand
for this and will use any means possible to prevent and preclude them from
stealing this company from its rightful owners -- we the shareholders,"
said Michael Hartleib, on behalf of Save Sirius and its members.
Contact:
Michael Hartleib
(949) 795-0580
savesirius@gmail.com
Good Plan......? Well, yes, it is. Is'nt it...
You sound pissed. LOL.
Why does a Day trader get so mad about a few people taking action against Sirius? You say your in trader mode. YEt, you blast anyone who speaks bad about Sirius.
I see... LOL...
Vote no Rev Split
AVOID SIRIUS AT ALL COST! LISTEN TO THE PEOPLE WHO LOST THE FARM AND AVOID SIRIUS...
Do you like that better... LOL... Round and round we go.
Today I am the one getting the direct attack. Shhh, dont speak bad about Sirius, the goons will get you....
Vote no Rev Split...
BREACH OF THE FIDUCIARY DUTY AND THE SHERMAN ACT.
Sirius screwed the share holders! Mel is a crook!
( MIKE POSTED ), I no longer trust management of this company as I know first hand what they attempted to do in the Manhattan Courtroom which was indemnify themselves and strip the rights of every Sirius shareholder. If this case were not withdrawn, thrown out, defeated, there would not be a single shareholder that would have any recourse against this company as the Settlement Stipulation was one of the broadest and most liberal releases which provided complete indemnification for all directors, executives, relations, for any and all misdeeds to date.
This company (SIRIUS) refused to properly notify you, the shareholder, via the US Mail, and asked the Court to allow a one-day ad in the Wallstreet Journal to be proper notification of the Class. I argued against this and prevailed.
I would also like to state that my holdings were purchased at substantially higher levels and, therefore, may not appear to be substantive enough for me to continue this fight. I can assure you that this is a substantial enough sum that I will and would continue this fight even if my holdings and position were substantially smaller.
In my opinion, the law has been violated. A federal agency is complicit in the conspiracy perpetrated by these two companies. We now have a share price that is $1.30. I ask all of you "How is this merger working out for you thus far?"
Simply stated: what I seek is to expose the truth, obtain the answers that I have sought for over two years now, to overturn the Consent Decree, return the $20million to Sirius shareholders (which I believe is the largest fine in FCC history – Univision was fined $25milion but I do not believe it was ever paid). I, for one, do not intend to spend a penny of shareholders' money to reward an inept agency that failed to regulate and enforce its mandates and become a co-conspirator in the conspiracy of these companies to prevent and preclude consumers from having access to or knowledge of interoperable radios. With Interoperable radio's there would have been no need for the merger as Sirius had the more compelling content, many subscribers if given the choice would have switched to Sirius,and therefore there would not have been the need to finance Xm's debt.
Contact:
Michael Hartleib
(949) 795-0580
savesirius@gmail.com
SHOW ME SOMEONE ELSE DOING ANYTHING BETTER? Managment is theaving this company out from under the share holder and people on the board want you to think its raining roses. LOL...
Vote no Rev Split...
So I have a question for those involved with the suit. And this is a not an attack just a question so take it easy... I have read the charges in the press release (which trust me everyone has seen since it was released Monday so no need to post it again. I did so Monday morning and anyone can see it in SIRI's mailbox). What I have not seen listed publicly is what you are seeking exacctly and how all of this will be implemented?
1. If you are seeking to remove current BOD and CEO, who is suggested for all of these positions?
2. Who will be in charge of the company's day to day business if above are removed?
3. Do you anticipate subs drop off during management change?
4. Who will then end up run the company and what are the financial prognostications under proposed new management team?
5. How will proposed new management deal with debt issues?
6. How will new management guarantee more company value and higher SP over current regime?
IMO... this action is too early in the game (all things considered and that we've all lost a ton of money). It feels more like a mutiny to me than a well-timed effort to recover lost securities funds. What is the suit going to do now if decent numbers are reported in the Q? Even if the numbers are just in line to slightly down, no judge will see the merits of this case (at this time) without giving the company further time to execute. And the problem that exists now is no one wants dilution or the reverse but you are now backing the company into a figurative corner in trying to raise the SP at this point. I thought we all wanted the SP to rehydrate (at least partially before the 12/18 meeting)? Well, technically by suing the company right now, it appears counterproductive to that goal to me. Meaning even if you still expect the Co. to do things like go to a bank to refi, now they will have to tell the bank they have a class action suit against them? Goodbye bank!! It's now that much more risk averse. What bank wants to loan to a company slapped with a class action lawsuit? Etc.. etc... etc...I think you pulled the trigger on this too soon IMO. To me there are way to many unanswered questions about the future. I'm as pissed as anyone about the lack of communication to shareholders and the undisclosed bondholder hedge in the original prospectus from late July. But it seems to me you wait and let the perp put their own noose around their own neck before you pounce. This has not happened yet guys. Now also, you have tipped your hand and allowed them to gather their wagons. And further, how long does anyone feel this suit will take to effectuate? How many lawyer hours? A company like SIRI could tie this up in court for YEARS my friends. I have also heard people say they don't want a Reorg. Did you read the Supplemetal Prospectus (Form 424B5). I posted this clause here on another board when it came out. The company explicitly states in writing that in the event of such CA suits, they could have no choice but to Reorg. Does this concern you? And if that does happen, not only will you get nothing, but neither will anyone still trading to recoup. I just can't undrerstand this timing.
So look, maybe my bigger question regarding the suit is: What is your end game/contingencies? Can someone lay this out for me by being specific?
All great question. Answers this early would be hard for anyone. Depending on who responds the motivation could change. So for the best answer go to the source of the filing.
Contact:
Michael Hartleib
(949) 795-0580
savesirius@gmail.com
Now, for me, Stop the Rev Split and cause some action on the finnancing and I think must of this will evaporate with a good SP. As for the suit its is like this "The enimee of my enimee is my friend". I could care less about inop-radios or FCC colusion except that is proves Mel is involved in some type of deception.
Mike H. provided me most of the documents (Most from FCC links) and some are very long readings and full of legual garb. Mike never told me exactly what to look for in the documents and his discriptions are veag. But, If you get on his mailing list and take the hours required to read it all. Wow, clearly Mel is doing some deep dark crap.
But, the fix comes from hi up. This case will not live. But, we must try and maybe we will stop the Rev Split and get a pop out of this nasty mess...
Sirius and Mel are Cooks...
Vote no Rev Split
Sirius and Mel are Crooks.... and the rest of my spelling errors,, Blahhh... LOL...
incredible post.........all great points / questions / concerns.
I'd love to hear a legitimate response to you, but I should have known it would be to "call Mike Hartleib"..... I'm not calling anyone. He can tote his happy ass over here and tell all of us.
Mark,
Your opinion you gave to sl62 says alot........
""But, the fix comes from hi up. This case will not live. But, we must try and maybe we will stop the Rev Split and get a pop out of this nasty mess... ""
It sounds more and more like you're just looking for a pop in the stock so you can sell and run.......
Well wouldn't everyone like that,,,,,,you can't make a stock do that just because you think you deserve it.
That's like betting $100 on the superbowl and then wanting your money back when your team loses because it rained and your star QB couldn't throw the ball in the rain. You didn't know it was going to rain so you want your bet back.
This economy is a fire storm. It's a crossroads of some very serious problems. Benchmark, American companies have or are going out of business. No one saw all of this coming this badly.
There may be some shady stuff going on and Mel may even be involved in something. BUT, these theories are out of control. Mel is a smart guy, but there's NO WAY he orchestrated all of this.......
How about this as a theory,,,,,,,this economy sucks, ALL retail sales suck, credit is all but NONEXISTANT, auto sales are dried up, and SIRI owes some money,,,,,,,,
They are also only 3 months into a merger that gives them 19 mil customers, $2+ bil in rev, auto deals with every mfgr., and complete ownership of the SATRAD industry.......
We haven't even gotten a quartly report that INCLUDES the merger, never mind one that shows the new company alone.....
You're downing the idea of being a trader...............a... what are you, "an investor"??? If you were an investor, than you'd support the conditions this company in dealing with only 3 months into this merger.......
You're all pissed because you didn't get your payday after the merger................... a bitter "trader"......
that's kind of my point and why I think the suit is somewhat ill-timed. What most people want is for THIS stiock price to go back up so they can recoup their losses (at least towards some facsimile to the revalue price)...not the rev'ed stock price necessarily. Of course after a reverse it could go higher eventually but the odds of that are slim due to the continued hurdles coming out of this economic downturn. But the deal is that if you don't want a dilution and reverse, then you should not be too cool about the timing of this suit. If it proves to be anything more than a nuisance, who knows what the company will do about it. Don't forget, crooks or not, they hold the cards right now and can play some death cards to you and all shareholders if provoked (and will probably get away with it due to the cover of the economic downturn). Later on after shareholder value is poof, gone, suits can fly but again, they can tie those up forever while under cover of BK protection. As said, I would have advised waiting until after the Q and then probably even the meeting to file, all depending on what was said and done in both. It's just too early for this type of action--esp, if what you are after is getting a different course of business action going other than the reverse and dilution. Going private right now is next to out of the picture. But adding lawsuits at this stage give something like a BK more possibility than without..if the company feels like that's their best play...there is a tipping point in every such decision and you never know where or when that point happens. Cos1000 said once before that this is like a big game of "chicken." I agree. You have to ask yourself why they bothered to draw up the Prospectus Supplement and it's contents. Why now? My opinion is that they know exactly with what they are dealing here and are setting up for possible future negative actions. So you have to ask if this CA suit plays right into their hands... Don't forget, if the company does file, the company and bondholders survive, shareholders do not. I would still at least like a shot to recoup lost investment monies before the annual meeting, which I still think is possible.
This section excerpt from the PS tells me that the defense has already begun:
>>Risks Relating to Our Common Stock
The Price of our Common Stock Historically has been Volatile. This Volatility may Affect the Price at which you could Sell our Common Stock, and the Sale of Substantial Amounts of our Common Stock could Adversely Affect the Price of our Common Stock.
The market price for our common stock has varied between a high of $4.15 and a low of $0.22 in the past eighteen months. This volatility may affect the price at which you could sell our common stock, and the sale of substantial amounts of our common stock could adversely affect the price of our common stock. The price for our common stock is likely to continue to be volatile and subject to significant price and volume fluctuations in response to market and other factors, including the other factors discussed in the risks related to our business and the business of XM Holdings; variations in our quarterly operating results from our expectations or those of securities analysts or investors; downward revisions in securities analysts’ estimates; competitive developments; and capital commitments.
In the past, following periods of volatility in the market price of their stock, many companies have been the subject of securities class action litigation. If we became involved in securities class action litigation in the future, it could result in substantial costs and diversion of our management’s attention and resources and could harm our stock price, business, prospects, results of operations and financial condition.
In addition, the broader stock market has recently experienced significant price and volume fluctuations. This volatility has affected the market prices of securities issued by many companies for reasons unrelated to their operating performance and may adversely affect the price of our common stock. In addition, our announcements of our quarterly operating results, changes in general conditions in the economy or the financial markets and other developments affecting us, our affiliates or our competitors could cause the market price of our common stock to fluctuate substantially.
In addition, the sale of substantial amounts of our common stock could adversely impact its price. As of October 24, 2008, we had outstanding approximately 3,312 million shares of common stock (including approximately 262 million shares of common stock issued and lent to affiliates of the initial purchasers of the notes in order to facilitate hedging transactions), options to purchase approximately 161 million shares of our common stock (of which approximately 117 million were exercisable as of that date at prices ranging from $0.49 to $31.25) and convertible notes convertible into approximately 188 million shares (at conversion prices ranging from $0.69 to $28.46). The sale or the availability for sale of a large number of shares of our common stock in the public market could cause the price of our common stock to decline. <<
>>The company explicitly states in writing that in the event of such CA suits, they could have no choice but to Reorg.<<
As shown in my last post, they don't explicitly say reorg...but to me they somewhat imply it--which is different. Just to be fair.
My main point is through their supplement they have gotten as defensive "in writing" as public company ever gets. So that tells me who knows what's next...
When you think about it, does the timing issue of the suit stand as something working against what I think is your objective to not reverse or be diluted?
Your comment:
>>How about this as a theory,,,,,,,this economy sucks, ALL retail sales suck, credit is all but NONEXISTANT, auto sales are dried up, and SIRI owes some money,,,,,,,, <<
Holds a ton of water. Good point. How in the world do you prove shareholder neglect or intent to fail amidst all of this (esp. at this point in the game)? I just don't get it...
I have said before that even if there was some plot from the beginning it's very tough to prove. I think the most real issue we all faced was not being told by the company in writing of the hedge (which they now just released). Cramer said it in August on the air, but no one not only believed him because he messed up on his calls on the stock pre-merger, but without it in writing from the company, no one even could have figured it would be so relentless as to take us this low. I truly thought that first dive to .68 would still be the standing low all things considered. And the trouble from there was it then quickly dropped to .48. And here we are. As I have said. Very hard to defend against.
Cover every post about the lawsuit and Mel being a crook with endless arguments and nonsence gobly goo.
No one is buying this guarbage anymore. Everyone who reads here knows the game and the goons. Sirius must pay alot to keep you guys posting...
Go vote for Obama or somthing. I am going to bed and get some rest before I face a new Socialist Nation...
Night all... Have fun aguing with each other...
Well thought through and stated.... wouldn't expect anything less. Thanks for taking the time to state concisely what is evident. They're, Markbmark, not listening.... unfortunately.. The prospectus that was released on 10/28 was also released on Aug 11th. I saved the earlier link after reading it. When I tried to access it is no longer available (from the earlier date). It is also not available through Edgar Filings. I thought that if a amendment to an earlier filing was made the earlier filing was suppose to remain. Any ideas or thoughts??
Siriusly depressed....
well said and to the point..... only the actions and communications of the company will tell over the next days and weeks.
Same to you...just trying to make logical heads and tails of a very complex situation. One almost needs to be a forensics expert. Your link sounds like more company mystery. If you still have that link to 8/11, you're right, the filing or record of that date no longer exists--either on Edgar or SIRI investor page. Here's what I found in going back over that time period. What is still of record are 3 supplemental prospectus filings and the original shelf registration prospectus from July 25. The dates are listed below.
424B5 prospectus filed pursuant to rule 424 Jul 30, 2008 733.7 KB
424B2 prospectus filed pursuant to rule 424 Jul 28, 2008 499.6 KB
424B5 prospectus filed pursuant to rule 424 Jul 28, 2008 726.8 KB
S-3ASR automatic shelf registration statement of securities of well-known seasoned issuers Jul 25, 2008 150.7 KB
Below is the hedging language from I believe the July 30. This was buried directly in the middle of a very long supplement--so if one didn't read the whole thing word for word, it would be easy for an average investor to miss, let alone understand the ramifications or to what degree (most likely the company's forethought).. The 10.28 supplement is much different in its language (including the updated stock crash info to-date and the .22 SP reference) AND not only is its language concerning the hedge, easier to find, specifics on how many shares were lent, ramifications etc..., but also where that info is located is different--pretty damn close to the top of the document. In this supplement, they also put in the reference to the class action suits. So besides updating the shares intention, seems like they took the opportunity to nail down anything that wasn't already nailed down or clear "in writing." I also have to say in re reading from those earlier supplements and now this new one...I can't honestly see how any shareholder lawsuits will stick. No offense to anyone trying. The company appear to have all their bases covered "enough" post-merger "legally." Unfortunately for many of us, we didn't assume the hedge realistically would lead to .22/.30. As said before, I figured when it bounced off of .68 on Sept 16, that would be the bottom. From there it bounced as one would expect and made it back to a buck. But then it was just the slow drift down to here. It's entirely possible and plausible that it would have stayed up there (to even a little higher for a range) had it not been for what happened to the market in Oct.--which no one could have predicted. And which IMO is what will be the toughest to prove from a shareholder recourse perspective. Although with this much carried debt, maybe it would have been impossible to keep the SP up. LIke I said, forensics expert! Personally, I wish I just would have stayed away from this stock altogether!!
Below is a lift from one of the earlier prospecti...
And Hmmmm. I wonder what the nominal fee is?
>>Neither XM nor we will receive any proceeds from the sale of the borrowed shares, but we will receive a nominal lending fee from the share borrowers for the use of those shares.<<
************
Risks Related to the Offering
The Effect of the Issuance and Sale of Shares of our Common Stock in this Offering, which Issuance is being Made to Facilitate Transactions by which Investors in XM’s Notes may Hedge their Investments, may be to Lower the Market Price of our Common Stock.
The underwriters have informed us and XM that they, or their respective affiliates, intend to short sell the borrowed shares concurrently with the offering of the Notes. The borrowed shares are being borrowed by the share borrowers under the share lending agreements. Neither XM nor we will receive any proceeds from the sale of the borrowed shares, but we will receive a nominal lending fee from the share borrowers for the use of those shares. All borrowed shares (or identical shares or, in certain circumstances, the cash value thereof) must be returned to us on or about the maturity date of the Notes or earlier upon notice from us that the Notes are no longer outstanding, or in
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Table of Contents
certain other circumstances. See “Description of Share Lending Agreements; Concurrent Offering of Exchangeable Notes.”
We have been further advised by the underwriters that they, or their respective affiliates, intend to use the share loans and the short sales of the borrowed shares to facilitate transactions by which investors in the Notes may hedge their investments through privately negotiated derivative transactions. The existence of the share lending agreements, the short sales of our common stock effected in connection with the sale of the Notes, and the related derivative transactions, or any unwind of such derivative transactions, could cause the market price of our common stock to be lower over the term of the share lending agreements than they would have been had we not entered into these agreements, due to the effect of the increase in the number of outstanding shares of our common stock or otherwise. For example, in connection with any cash settlement of any such derivative transaction, the underwriters or their affiliates may purchase shares of our common stock and investors in the Notes may sell shares of our common stock, which could temporarily increase, temporarily delay a decline in, or temporarily decrease, the market price of our common stock. The market price of our common stock could be further negatively affected by these or other short sales of our common stock, including other sales by the purchasers of the Notes hedging their investment therein.
Adjustments by Purchasers of the Notes of Their Hedging Positions in our Common Stock and the Expectation Thereof may have a Negative Effect on the Market Price of our Common Stock.
The shares of our common stock that are being offered in connection with the share lending agreements are expected to be used to facilitate the establishment of hedge positions in our common stock by investors in the Notes with respect to the Notes through privately negotiated derivative transactions. The number of shares of our common stock offered hereby may be more or less than the notional size of these desired hedge positions. Any buying or selling of shares of our common stock by investors in the Notes to adjust their hedging positions simultaneously with this offering or the concurrent offering of the Notes or in the future may affect the market price of our common stock.
Changes in the Accounting Guidelines Relating to the Borrowed Shares could Increase our Reported Loss Per Share and Potentially Decrease our Common Stock Price.
Because the borrowed shares that are being offered (or identical shares) must be returned to us at the end of the loan availability period under the share lending agreements or earlier in certain circumstances, we believe that under U.S. GAAP, as presently in effect, the borrowed shares will not be considered outstanding for the purpose of computing and reporting our (loss) earnings per share. If accounting guidelines were to change in the future, we may become required to treat the borrowed shares as outstanding for purposes of computing (loss) earnings per share, our reported (loss) per share would be decreased or our reported earnings per share would be reduced and Sirius common stock price could decrease, possibly significantly. In addition, if the borrowers of the borrowed shares failed to perform their obligations pursuant to the share lending agreements and return the borrowed shares for whatever reason, such shares would be included in all calculations of (loss) earnings per share and we may be compelled to sue for damages which may not provide an adequate remedy.
The unconfimed earnings whisper is still tomorrow (11/6). So I guess it will just be a surprise to all. This drop today could be in anticipation of that I suppose--since it couldn't exactly be considered profit-taking... Hard to tell when we're working in the dark...
Just for them to allow "naked short selling" is an abuse of power.
I believe there is corruption in the management of Sirius/XM but now is not the time to make noise when the company is struggling. We need to send a message to Mel and let him know that if this company only survives on the long stockholders expense then we will than put the hurt on him and all involved. If we pulled all our subscriptions at that particular time, then this company would find a "very hard time" in further suceeding. So Mel go out and get the financing or acting pursue a buyer that has the means to bring this company forward.
I am just amazed that some well established company does not try to take us over. After all we have the entire spectrum. This makes no sense to me. Everyone knows that if we get from under our debt, this model will fly with proper management. Management that does not pay too much for anyone entity.
Vote NO REV-SPLIT or he will have us shorted again!
Vote NO MORE SHARES or he will delute to the value of toilet water!
KICK MEL OUT!!!
Vote NO REV-SPLIT or he will have us shorted again!
Vote NO MORE SHARES or he will delute to the value of toilet water!
KICK MEL OUT!!!
Mel said he still can't figure it out. But maybe its the GoodWill.
COOKing the BOOKS to get EBITHA? How do you waist 4 Billion and still show les neg EBITHA? You cook the books!
Wow can this Crook Cook!!!
Vote no Rev Split
analysts
analysts
analysts said " pay its debt, and the moves it is planning "
The plan is to rip the stock holder off BIG TIME!!!
MEL IS A CROOK!
Vote NO REV-SPLIT or he will have us shorted again!
Vote NO MORE SHARES or he will delute to the value of toilet water!
KICK MEL OUT!!!