Will John Malone Rescue Sirius XM? 250 comments
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Sirius XM Radio (SIRI) is trying to avoid filing for bankruptcy and is attempting to renegotiate its pricey contracts. Meanwhile Mel Karmazin's company is looking for an investor, in talks with John Malone's Liberty Media (LINTA), in order to avoid a hostile takeover.
This coming Tuesday, February 17, Sirius XM will have $175 million in debt come due, and it's unlikely that it'll be able to pay up. The company carries a total of $3.25 billion in debt. With the stock down over 95 percent over the past year, now trading around 7 cents, it's been a rough year for the company that conquered FCC concerns to merge two rivals. Now CEO Karmazin is trying to renegotiate programming deals with Major League Baseball, the NFL and Oprah.
In the midst of its financial troubles Sirius XM is getting caught in a battle between the two largest satellite TV providers. Echostar (DISH) has been buying Sirius XM's debt, looking to take over the company as part of a strategy to keep the satellite radio company solvent. Looking to avoid that takeover Sirius is turning to John Malone's LIberty Media which has a controlling interest in EchoStar's competitor DirectTV (DTV).
Now the battle is on between John Malone and Dish's Charles Ergen for control of the struggling radio broadcaster ahead of the Feb 17 deadline. An investment from Malone could make EchoStar's takeover more expensive, but if EchoStar wins the battle, CEO Mel Karmazin would likely lose his job. If Malone's Liberty does a full-out acquisition, Karmazin would likely keep this role.
The decline of Sirius XM is pretty remarkable. There was so much opposition to the merger of these two rivals. But its stock price, hovering under a dime, just goes to show that there truly was enough competition that the merger was anything but anti-competitive.
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too bad companies are not required to always post their bank accounts.
On Feb 13 03:22 PM Sirius Roadkill wrote:
> I think homer may have this one right too . . . next announcement
> will be that the May bank debt has been restructured contingent upon
> paying-off the Feb converts.
>
> I wonder how any of the restructuring would/will effect the current
> cash reserve requirements (which we still have been unable to nail
> down); I wonder if that could free-up additional cash to take-out
> Ergen?
On Feb 13 03:24 PM mogami_99 wrote:
> Hi, I am now a subscriber. Just signed up for the internet option.
> The music sounds CD quality to me but I must admit I have a severe
> hearing loss from military service.
I did disagree with Homer on the forums when it came to the COH and the burn rate compared to the cost of the 1st quarter. I did not think he included that there is revenue that comes in in the 1st quarter and that you really have to look at 2008s 1st quarter cash burn rate for both before you can come up with any numbers like he had. I have been waiting for a reply but have not seen one as of yet.
Restructuring other debt might lower the reserve which would free-up the needed $175 . . .
On Feb 13 03:29 PM mogami_99 wrote:
> Hi, If they have 175mil for Feb then Ergen has nothing. The terms
> of the debt are Sirius will deposit the balance in 3rd party account
> by certain time on 17 Feb. 3rd party then waits for holder of bonds
> to collect. Once Sirius makes the deposit on time their obligation
> is fullfilled. If they have 175 million then they are fine. If not
> and they do not obtain it by 17 Feb then all the other deals default
> right along with the Feb debt. (it is in the wording of all these
> bonds and warrants)
> too bad companies are not required to always post their bank accounts.
>
On Feb 13 03:28 PM FoolNHisMoney wrote:
> Cos, I still think that they could/could have handled the Feb hurdle
> without help. The rest of the debt may still have been a problem,
> but sure as hell not just the Feb debt is enough to have forced BK.
> I think all this BK rumor is being intentionally release by none
> other than Mel to give himself a stronger negotiating position with
> the debt holders at this convenient time - i.e. he is using the Feb
> hurdle to leverage his bargaining abilities on the remaining debt.
>
>
>
> On Feb 13 03:13 PM cos1000 wrote:
Wouldnt that be secruities fraud?
Come to think of it, Im going out on no limb here and say if they do file BK on Tuesday, I will be FLABERGASTED based on todays SEC filing. Thats the only fact of the day. So lets focus on that.
They would be sued left and right, judge might deny them anyway, might indite them for bk fraud, and the stock that was just issued would be suing too. And now the new debt is in the back of the line in a bk court? I dont see that happening.
On Feb 13 03:30 PM 163888 wrote:
> I have known it for some time after hearing them talk about the Iraq
> war, Obama, and the recession that started in 2007.
>
> I did disagree with Homer on the forums when it came to the COH and
> the burn rate compared to the cost of the 1st quarter. I did not
> think he included that there is revenue that comes in in the 1st
> quarter and that you really have to look at 2008s 1st quarter cash
> burn rate for both before you can come up with any numbers like he
> had. I have been waiting for a reply but have not seen one as of
> yet.
Thats complete bs..This is getting embarrassing for them...
Pulling out all the stops I see.
I've had this stock since it was around 3.00 and have averaged down over the past year many times. It's been a heck of a ride, and I can't wait to see what happens over the long weekend. Good luck, fellow believers!
If i were to explore this a bit...Indulge me please
If there are more big money buys than sells, wouldnt it make sense that the shares would drop all this time, with no real good news to support it otherwise, and couple that with the huge SI on this stock..
I would think the big money buys say this...Get me the lowest price you can get me and I will do big business with you again...
The common investor says ...I dont have a clue what I just clicked,but my 100 dollar order sure looks cool when it fills on my screen..
ETRADE does not use only one delivery servcie, there buys and sells are spread out on about 5 possible ways..
So Im thinking with more influence as a man purchasing 5 million dollars of stock a day back and forth, he has some ability to manipulate his best price, compound this with constant buy requests on the way down, with little retail interest, just enough to soak up, and you had you .12 cent bottom(prior to this bk scare.).
If BK does not happen, and this stock does go over $1 again, Im sure this is what was going on..I would love to see actual stock ownership list for Sirius at this very second...Probably know if 5 secs looking at the action the last 3 days exactly what is going on...
The sheeple like us are just left to guess and gamble...Thrown only the facts the law says we need...
A battle victory today. Well fought to all.
Colonel Killer...you and the Lieutenent Colonel Blue Dog were missed today...we fought hard and the enemy is retreating and on the run...we live to fight another day. We even had Teddy Roughrider with us today carrying his big schtick...
Field Marshall Mel is cooking up the final move for the box canyon surrender...
Over and out..
credit watch but still has a negative outlook?
On Feb 13 05:02 PM Wolf Child wrote:
> What does "removed from credit watch Neg" mean?
On Feb 13 06:41 PM Wolf Child wrote:
> Does it mean they were removed from a negative credit rating status
> or removed from
> credit watch but still has a negative outlook?
As I have said time and again....thanks for keeping the faith and pointing out the biased media and whirling lies that have been blowing constantly and especially of late.
A lot of us wouldn't have made it without you. I echo the sentiment of many by saying that I have also learned a lot from all of you (and even a little from those trash taking bashers who just don't get it).
Thanks! Peace! Here's to another chapter (but not 11 or 13) on Tuesday