Sirius: A Deeper Look at the Liberty Deal 184 comments
-
Font Size:
-
Print
- TweetThis
While Sirius XM (SIRI) investors were dancing a jig Tuesday, there are several things that need to be considered going forward. The deal definitely gives Sirius XM breathing room, and has a potential to bring about some interesting dynamics, but in the end there is a cost to this deal, and that does need to be contemplated.
Headlines
Perception means a lot. For months, the debt of Sirius XM Radio has been a focal point in nearly every headline and story about the company. Even when good news was announced, the under-tow of debt acted like an anchor for the equity. With the debt issue resolved, the company can now enjoy stories and headlines that no longer speak of the debt. For investors, this is a good sign, as the main focal point will be the positive news rather than looming debt. With Liberty coming to the game, the perception associated with this company can now improve.
Share Count
What we know is that Liberty will get control of about 40% of the equity in Sirius XM Radio. At this point there are not enough authorized shares to make this happen. The company does have authorization to bring the authorized share count up to 8 billion shares. Some dilution will need to happen to get Liberty their stake in the company. While exact figures are not available, the company will need to end up in the neighborhood of between 6 billion and 6.5 billion shares in the market. The good news is that it looks like the share count does not have to get to 8 billion mark, but dilution will need to happen.
New Board
As part of this deal, the Board of Directors will see some changes. It would appear that Liberty will get a minimum of two board seats. This should inject some fresh ideas into the direction of Sirius XM Radio. Liberty Media (LCAPA) has several outlets that could well work in synergy with Sirius XM Radio. Content deals could take on a new flavor, and package bundling is another viable option as the company moves through 2009 and into 2010. While a Board of Directors does not manage the company, they do carry influence on the activities of management. For some investors, who have been critical of the current board, the knowledge that there will be some new influence seated at the table should be welcomed news.
Debt Still Exists
The fact of the matter is that the company still has debt. Going forward, there will still be payments and interest that will carry an impact to the bottom line. Should the company see successes and good cash flow, there is potential that Sirius XM can begin to retire debt. Prior to the merger, XM had made several prepayment moves with their debt, and the stock typically responded in a positive manner. The debt clouds are more distant now, but they still exist. Investors need to bear this in mind.
Reverse Split
This piece of the puzzle is still on the table. The company has the right to conduct a reverse split at any point during 2009. While this initiative was theoretically enacted to stave off a delisting from NASDAQ, the requirements of the exchange have been relaxed, giving the company some time and wiggle room. However, if the company remains below $1, there could well be a point in time where Sirius XM Radio does need to enact a reverse split.
In the end, there are still many things for investors to consider when contemplating their existing investment, or making the decision to become invested. For now, investors can dance a jig, and enjoy the fact that the company is much further away from possible bankruptcy.
Disclosure: Author is Long Sirius XM Radio
Related Articles
|
-
The Seeking Alpha 100
See allThe top 100 stock
market authors
selected for publication
Seeking Alpha 100 » -
Fastest Climbers
Authors with the largestSee all
increase in followers
in the last 7 days
Fastest Climbers » -
Top Commenters
Top commenters,See all
as ranked by their peers
Top Commenters » -
Top Instabloggers
The 100 most active
Instabloggers.-
1
David Fry
-
2
TraderMark
-
3
Don Dion
-
4
Cliff Wachtel
-
5
Mike Havrilla
Top Instabloggers » -
1
-
Top StockTalkers
TopSee all
StockTalkers.
Top StockTalkers »
This article has 184 comments:
Also they cannot aquire more then 49 percent for 3 years. Did I mis read the 8k?
unless we both misread it...no you didn't
On Feb 17 03:15 PM asm61064 wrote:
> mogami,
> unless we both misread it...no you didn't
Mel sold the shareholders for his own interest and EGGGGOOO
(would still only be 25% of present float)
Possible scenarios also include Siri buying back shares during interm to reduce float.
If they do not execute R/S in 2009 they will need to request authority to do so at share holder meeting each year.
In any event they will likely wait as long as they can before actually doing the R/S but now they have a real motive to do the max (1-50) rather then just enough to maintain listing.
Go to the other article! You'll enjoy it much better!
On Feb 17 03:28 PM amibankrupt wrote:
> Mel was offered $1.37 per share in Dcember by Charlie Ergon ... was
> not that a better deal than the one they did today.
>
> Mel sold the shareholders for his own interest and EGGGGOOO
I put a buy in at .15. Hopefully it gets filled....looking so. Only problem is I didn't have a whole lot after I bought up some WFC today. At least I am adding shares at below what I already hold.
I am going to try tomorrow and sell right at open and rebuy after lunch.
Don't take my advice because I'd hate to be wrong and mess up other peoples strategy.
On Feb 17 03:35 PM asm61064 wrote:
> mogami,
>
> I put a buy in at .15. Hopefully it gets filled....looking so. Only
> problem is I didn't have a whole lot after I bought up some WFC today.
> At least I am adding shares at below what I already hold.
It really depends on things like upgrades, positive Q's, and how the general investor interest will go from here. SIRI's image is damaged. Many on the Street and various authors gave it up for vulture feed. Mel pissed some people off along the way and entities like the NAB will forever seek to make SIRI's SP life miserable. Charlie Ergen is now a sworn enemy and who knows what he might scheme up. Overall, some repairing needs to be done and it won't happen overnight. Given the right conditions lining up though, I think we could see a buck sometime before summer. It may not hold it, but I say we touch it in some way...
how about 'never'?
On Feb 17 03:59 PM rtatp31 wrote:
> So does anyone have an speculation on how soon we will see the price
> in stock climb to over a buck--there is another article that states
> a 1 in 3 chance that by January it will be at 2.25 (i think thats
> correct) -but what about getting over a buck
I knew they were not going BK. I KNOW they will extend the May debt. I know Q4 will be a good report. What I dont know is what that means to the stock price, and the time range it will happen. Thats even harder to guess. But as each hurdle comes up, the media will tip its hand to show you the probably outcome. I am still long, and I will trade the stock again tomorrow. I did no selling today, as it was too close to the announcement to trust anythign the MM"s were showing me.
For instance...
8 million shares blocked .16 cents late in the day... They came out of nowhere.
Volume today was great. No complaints there. I will no longer even Guess at price action. No point. If i can be off by 100 percent on a conservative estimate, my predictions do no one any good. Good luck, and see you tomorrow or later today.
Hi, by "near future" you mean 2012 right?
On Feb 17 04:17 PM jswede wrote:
> "over a buck"??.... that would mean a market cap of over $3.5bil....
> on a company with liabilities > assets, that has never made a profit,
> and was jsut "saved" from bankruptcy with a 15% loan and by giving
> away 40% of the company in the near future....
>
> how about 'never'?
>
> On Feb 17 03:59 PM rtatp31 wrote:
jswede -i think you may wrong -then why would Malone agree to
the prefred stock with the option to convert to common stock if he didnt anticipate it would go up --do you not like this stock???
When that dilution does happen, does anyone think Malone will sell those shares and loose his 40% Equity Position? I think not.... If he does I will be selling right behind him.... So even when that position is taken, it will most probably be held and not available for the open market.... He will probably continue to hold them as Preferred because the conversion is at his option, not mandatory until 2012 ,I believe. I need to read more on that to be sure. Anyone know for sure?
Meanwhile I did want to find out more about The Hart-Scott-Rodino Act, because it was mentioned with no explanation to the uninformed on these matters, like me. I put a link here for anyone else who wants to find out what that's about. You guys might have discussed this stuff already and I am just playing catch up, if so, sorry....
The Hart-Scott-Rodino Antitrust Improvements Act of 1976,
library.findlaw.com/19...
To be fair...J&J has their place too....nothing wrong with buying the solids....but anyone trying to complain about SIRI right now has NO BUSINESS going anywhere near it...those weak in the stomach need not pay attention. It is still in for a wild ride....just not quite as violent!
On Feb 17 04:30 PM cos1000 wrote:
>
> The Hart-Scott-Rodino Antitrust Improvements Act of 1976,
> library.findlaw.com/19...
as far as "useful comments", even when I did have them -- back in the spring when I was the ONLY ONE talking about debt (click my name and look it up), and this summer when I was talking about other media competing (ie wifi etc) it was not well received - nobody wanted to hear anything negative (reality, that is) so I quit.
I just jab some comments once in a while to keep ridiculous expectations in check... or perhaps it's just for fun...
I bought WFC today on the cheap....it was a nice purchase at what I thought was a good price( till I saw the finish today) I get greedy....but it doesn't get my blood flowing like SIRI does. My SIRI pot of cash....does not co exist with my other investments...it can't! I like to have a solid core of stocks with dividends for growth! But I love the action on the spec plays. always the positive side tho.....which is my big problem, I see no point in destroying any company for financial gain. Crazy ..I know...but I just can't help myself........ I like nice dreams.
I am not a day trader so I am not allowed to sell a stock and then rebuy it more then 4 times in 1 week.
On Feb 17 04:30 PM 163888 wrote:
> First of all I have no problem with trading this stock when it gos
> up and down a few pennies (I have always been in favor of people
> being able to make a quick buck). I do have a problem when the same
> people that do that think it is going to go up some huge amount.
> Why is that you ask BECAUSE YOU ARE THE SAME PEOPLE THAT ARE HELPING
> IN KEEPING IT DOWN. It is like the same people that get mad about
> a US. auto company outsourcing after they just bought a Toyota themselves.
> So pick a side and stick with it. You cant have it both ways. You
> cant expect a stock to take off and still be able to trade on the
> small ups and downs of it.
Carry on.
Carry on.
Carry on.
Upon expiration of the applicable waiting period under the Hart-Scott-Rodino Act, the preferred stock will be convertible into 40% of our outstanding shares of common stock (after giving effect to such conversion). Issuance of the preferred stock is subject to the satisfaction of certain conditions, including the conditions to funding under the XM Credit Agreement described below.
On Feb 17 04:42 PM mogami_99 wrote:
> Hi, That act concerns gaining 50 % of an interest. Liberty agrees
> not to aquire more then 49% for 3 years
>
>
> On Feb 17 04:30 PM cos1000 wrote:
I'm talking to Relmor, cos, sl etc... those who have been around
A bunch of numbers, you are wrong...
Big money buys and sells move all stocks. Retail investors in and out maybe 1% of the rest of the difference. You just seem mad that it didnt go up higher. Blame the huge buy orders that must be filled at a reasonable price...The retailers are the only reason there are shares to buy, true, but they will run out, and move on soon enough now. No short term play here for the gamblers. BK off the table, bottom feeders will move on. They cant read a balance sheet, and probably dont even know what a bond is.
I didnt think .31 cents was a HUGE gain, compared to other levels it traded at compared to the negatives it was facing at those times. Some prices I was hearing were crazy, and I helped to try to calm those down. I said .50 cents would be only if May debt was cleared up, and it hasnt been.
.35 cents around was for todays pop, but that might happen tomorrow, or the next day, when no one is looking. Besides, with Cramer just denouncing this stock as worthless, it should be moving north just fine. Once retail buying ends, and retail selling goes to a crawl, this stock will jump a lot higher than here. Not making any guesses, but I would imagine the last 2 days of gains are a foreshadowing.
So I know .16 is not the high we are going to get from finally getting the news we want. I don't know where the upper limit is but I suppose it will be above these early days highs. We hit .22 today so upper limit is above that. We closed at .16 so if tomorrow we have a high of .25 and close at .19 we are tracking my SWAG.
Siri has much less a stranglehold on content -- who knows who they will be able to hold onto - from personalities to leagues...
Wifi has taken huge strides in less then a year -- it was a figment back then, but now ALL car manufacturers have plans for full internet in the next year... and then there's the portable devices...
it's not there yet, I agree, but then Siri hasn't made a profit yet either... which comes first?
On Feb 17 04:52 PM 163888 wrote:
> jswede, I will say the same thing again. First of all content is
> and will aways be king. Second until you can get WiFi all over the
> place AND take the price of getting it less then the 13 dollars that
> SIRIXM charges they will not be real competion.
Had I not been such a lamb today I could have added 20k shares without spending another cent. I think it was silly of me not to have done so. I will always regret my lead feet today. I had the trades set up I just didn't hit "continue"
On Feb 17 04:59 PM 163888 wrote:
> mogami_99, I am not saying it is you are anyone specific. What I
> am saying is what did you see as you said you could have bought and
> sold 3 times that is people selling then buying and selling then
> buying again. That is exactly one reason it is hard for a penny stock
> to get above a buck. All that kind of selling helps in taking the
> momentum right out of the up side.
I will nibble my way up in number of shares using my 4 buy and sells a week.
Let me ask.....what makes you think wifi is in direct competition with SIRI?
Wifi will doesn't let you do ANYTHING that a CD/MP3 player and radio don't already do....unless maybe you have a wifi connection in your car.....and pay a subscription fee to listen to SIRI!
siri will hold onto content. where are the personalities and sports going to go? terres radio is dead
On Feb 17 05:07 PM 163888 wrote:
> jswede, no to be honest there really hasn't been they still have
> way more problems then satellite radio has. The only car I know of
> is from crysler, and that one you need to be at a stand still and
> by a WIFI connection for it to work. I am not even to get into the
> cost of getting the basic internet service which is still way more
> then the price of SIRIXM. Now do I have to bring up what the internet
> radio companies were just saying last year about the royalties and
> barely being able to stay in business even if the RIMM royalties
> stay the same.
Reading the deal again, I still like it. In fact, I like it a lot. Better than issuing shares to pay debt right now. Because later if they sell shares, they should be able to get more for them.
Hey Cramer, if this stock is dead, why does Malone want it? Why did bondholders take it at market value(no discount). Cramer is a POS.
Just got back to see we closed @ .16. Well...not ideal for this type of news but let's review possible culprits...
1. First, 1 has got to be our thanks to John Malone for making his pockets availiable. Without him, we have a COMPLETELY different day. Just go ask Trump investors. Sure Malone was in a great position to do well for himself but look at who has his meathooks in SIRI now. Freakin John Malone, Liberty and Direct TV (tangentially). I love this potential for just about who knows what. This has opened new doors for SIRI and SATRAD...period. Yes, 15% is high and this is what Mel waited so long to avoid, but in the end thanks to Ergen, he just ran out of real estate and had to pull this trigger. As we opined for days now, NO WAY could Mel BK this company at this stage. He would have been the laughing stock failure of the century. Enough said about number 1.
2. Overall market sentiment today was one of the worst of '09. Maybe THE worst. Just horrible timing. Shorts came out of the closet today and controlled the day...and SIRI. Hard for SIRI to overcome this in any major way since the sentiment for today was scaring nobody into thinking they should buy today or even necessarily cover today.
3. Shorts had this day measured. From what I saw on my board, the resistance was hot and heavy. MM's and shorts played this one to perfection and forced plenty of panic selling. Problem: With so many holding large blocks and dumping, just too many shares for sale today. You bet MM's were gobbling up shares for their own coffers. That's OK we will live to see better runs than this. I wouldn't have believed a .06 gain was all that would materialize today. On a normal green market day, we should have traded in the mid .20's.
4. As we predicted MSM moved on to May Bank..and hard. However, in our favor in the deal, two things are noted: 1. That the Malone money beyond the 172M Feb is contingent upon succesfully negotiating extensions for May debt facilities (at least the JPM). Good news there is that renegotioation was probably contigent upon the Malone deal consummating..so just a timing thing to complete with both parties. And of course JPM is also on our consulting team...so no worries there. Now, when that news is released, we should see the rest of our pop....at least .10 but on the right day could be a whole lot more. And 2. In the deal it says SIRI is hard at work at finanlizing May bank extensions. So that news might be just a day or two away.
5. Let's revisit timing, which has been totally at our disadvantage. As we all know it's just been hard to get just about anything done and released at the proper time. Never once were Mel and Co. able to shock the Street with news that sticks. It's either been rumors that don't hold or just mediocre news that means little. My case in point is this last week and a half. Let's just suppose one little swap for a minute. That this news today came in place of the Charlie Ergen rumor that popped us intop thte .20's first..only for the SP to completely fail to .04 on what ugliness that rumor exposed. If this news were in that timeframe, this stock opens that day @ .30 and takes off from there. I would swear by it. What have today is, as said from the Ergen rumor, too many that were able to buy in @ .06 - .08 and were going to dump today. Had we held our .14 and popped on real news, premarket that day would have looked way different. So just timing. Sometimes it usually better to shock the Street rather than give them long weekends to prepare a strategy. Oh well..it's SIRI's luck...not the best so not the best result for us.
6. Autos were sucking wind today....
7. I will finish with revisiting number 1..which again, today could have looked much different. If our headline this morning was: SiriusXM Files For Bankruptcy...given the amount of buyers who were allowed in @ .06 and all else who would have jumped, this SP not only wouldn't have gotten out of the .02's today it might have closed @ something like .0180. Ticker would be gone from the Nasdaq and in the Pinks already...and the future would be cloudy, messy and extraordinarily uncertain. Instead we closed @ .16, the future looks bright, we stay on the Nas, and life with SIRI just got way better than it was yesterday. I'm happy with the latter regardless of how much money I didn't make today. It will come in time and sooner than later. It's a start of something new...in a good way. IMHO...
Retail buying in and out has little to no affect. The MM's can use this to justify how it flows, but if its a zero sum game for those traders, they did nothing to affect the overall price.
As I said before, I didnt sell this stock today, i only added, once I realized that was the only play today. Dont remember GOOG complaining about traders on there way to 700. If a stock deserves to go up it will, but with no time frame. You over estimating the effect traders have, especially with high volume.
Quite simply, here is my issue with your commentary:
You are supposedly extremely negative on the company's outlook. Yet you are long the stock - a penny stock. Yet you think there is no chance the stock will ever hit $1. You must be smart enough to know that a penny stock not on its way to a dollar is on its way to 0. Therefore, if the company's prospects are so bleak and the stock is on the way to 0, why would you be long tens of thousands of shares?
You make no sense. I won't pretend to know your intentions, but my bet is you are ticked you missed something, you don't have the guts to get on board now, and you want to take pot shots and some of us.
If you want to be long, be long. Even use constructive criticism as I have in posts. I am not blindly long, I am a realist. If you want to pound the stock into the ground, great, do it...but don't tell me you were scooping up shares at a nickel when you knew the company supposedly sucked so bad and had no chance to get to a buck.
Carry on.
The dog got out a little today but the gate to the fence was locked. More a victim of its own bad timing than anything....soon that gate will be unlocked and the dog can get some good exercise...hang in there. In the meantime, he can finish gnawing on Ergens bones and sharpening those teeth more. Sure Ergen made a little coin today, but he didn't want coin, he wanted to help himself survive the future. Not so fast, now....
I like your dog man....
I have to watch Cramer today. I gotta hear this as I watch the albumin dripping off his face...can't wait!
Lets see what our average increase has been in two weeks.
Look to see if we have any down days. (I would really be suprised to have a down day without a really nice increase the day before)
As long as we do not start having down days before SP reaches a reasonable level I'll be content.
I agree with you. I would have loved the large jump in SP, but am just as happy with 5 cents/day for a week or two.
I'm not able to trade the way Relmor does. (Wish I could, but am too green.) As a poker play at heart I love the action, but I know the real goal is overall profit.
Stick around a few more days, guys. SP is just taking off.
the company and the common stock are NOT one and the same.
back when I hated the stock (b/c of debt and coming competition squeezing margins), I never thought the company was dead in the water -- it has a niche and will continue to, and it will likely evolve into other forms etc.
I hated the stock and my expectations for the company were MUCH MUCH lower than most anyone else on the board. but I never thought the idea of Siri was absolutely obsolete --- my points on wifi/internet are/were just things that were going to hit margin little by little, more and more as the years go by --- at the same time SIRI was (maybe?) finally turnign a profit -- thereby putting a ceiling on the company.
(and once Internet Radio is evrywhere, it will have no debt to deal with so they can 'steal' any "content" Siri has without a problem - imo and years down the line, I admit)
So anyway, I got back in when I thought they were ripe for takeover, and again when Ergen was buyign last week. It was a gamble and I have modest expectations.
Still hate the stock longterm but it's a trade I bet could double (to $.40 maybe?) in the nearterm on some "good" (maybe mis-interpreted?) news one day...
So now, in this case, I like the stock more than the company -- at least in my timeframe. Situation reversed.
The company still has much trouble, though I think it will eventually make it thru, but this company won't ever be the star many want/hope/think -- that boat sailed in the last couple years.
...and the different entity that is the common share is - imo - never coming back near a buck. It will continue to get diluted and beat up over the years - maybe completely wiped out at some point. but I think it can be a good trade.
I'll have a sell order at 40-60 cents every day. Hopefully the "good news" day comes before more bad news and it gets hit and I move on.
sorry to piss a few of you off. "carry on"
If you knew what "carry on" stood for, you wouldn't be mocking you child.
What's up man. Been a long run huh? Well...how surprised are you that Mel pulled this off? You gotta give him credit. He at least just bought his little project a few more years to do something. I think this tie in today is very strategic and created many new potential doors for SATRAD. Maybe it's not meant to be a standalone (but also maybe it is, we'll have to see), but it fits well in with other Sat delivery situations. This is a good partnership/exposure for SIRI going forward.
Also on the SP. Remember, the revalue was 1.50. Granted there has been more dilution and another 24M shares are left to go to Malone. But, as a spec play which creates unpredictability, and that just 6 months ago, based on the same debt load (now just pushing back), why wouldn't this SP gravitate back to the 1.50? I think it would and it will once the SIRI cred/profile gets a new wax job. It's taken quite a hit and needs some detailing. Your thoughts?
Carry on.
If you mean the post @ 5:22 up there, it was mine but cos1000 certainly could have written it (lol)...I agree that eventually MM's wil have no choice but to really capitulate...we've seen it before...Did you ever trade the old Proxim (PROX) back in the day? Similar happened to them. MM's loved to mess with them 'til they couldn't hold it any more and had to let it go. Once they did everyone piled in. Similar to SIRI the first time around too. The list is long. AKAM was another one. Same will happen here...
Thanks for your commentary today. You and I seem to think alike...
I'll give him a little credit --- but having 2 egos at your disposal to play against each other wasn't ALL skill -- lol. Yes, I like the **company's** prospects better today than I did last week.
As far as the common, the $280mil loan costs them another $40mil/yr. Back 6mos ago, I don't think the $40mil/yr on the $550mil 7% converts of '14 and the $100mil/yr on the ~$780mil 13%s of 2013 were not yet fully digested...
it wasn't until months later - well after $1.50 sp - when most caught onto how "ugly" that deal was -- most were caught up in the merger consummation. That's almost $175mil more a year in debt service they did not have in mid-July 2008. and I fear reworking the bank loans will also be ugly...
then there's the uncertainty of further dilution, further debt, further higher interest rates on re-fi'd debt.... not close the amount of trust today vs 6mos ago.... and then the outlook for the consumer and subscribers is not the same as 6 mos ago either...
I really don't see anything helping the "cred/Profile" --- yes, they "made it" to play another day, but they went deeper into the mud in the past 2 weeks than we ever thougth possible. They won't be "clean" anytime soon -- more than detailing, imo.
I don't see anything justifying a $7-8bil market cap (ie $1.50 sp) anytime soon. It's still an ugly balance sheet (even uglier, actually) -- btw, do they still carry all that 'goodwill' from the merger? some synergies, huh? that is thin air, if so.
I'm not 100% up to speed, I'll admit, but in short - yes, I think it's very different than 6mos ago.
That's our nemesis. We get backward-looking SI info (always one half month behind). The next report, Feb A, won't be out until the end of Feb. It closed on or about Feb 13. So the Ergen rumor spike and BK plunge will be in there but not today....
Let's not forget, today was a great day for all the believers in this stock and the good news will continue to present itself in time.
Best Regards to all the supporters!
Long SiriusXM
Thanks for reminding everyone that the alternative to today was as you say, BK, pink sheets, and under 2 cents......
I made a couple of comments earlier about dilution and the preferred stock. The reason I think Malone holds on to preferred without conversion to common is this line in the agreement that gives his equity priority to the common in cases of liquidation. He can convert at anytime to common if he wants to raise cash and give up some of his 40% position, but until the company is making money this is his protection in any future BK. Prudent for him to keep those shares off the market until the company he now owns 40% of, is flourishing.
<The preferred stock will, with respect to dividend rights, rank on a parity with our common stock, and with respect to rights on liquidation, winding-up and dissolution, rank senior to our common stock. Dividends on the preferred stock are payable, on a non-cumulative basis, as and if declared on our common stock, in cash, on an as-converted basis.>
Another interesting item is that Sirius Xm can still be sold to a higher bidder and this Investment Agreement can be terminated for $7M. The cannot solicit a bid until after April 15th, but if one were to come along they can entertain it. I think this part of the agreement truly makes it a "bridge loan" if someone makes a more beneficial offer to shareholders, than this offer represents. Maybe their are other parties out their interested, but unable to bid at this time. How many shareholders would sell their shares for $2.00 - $3.00 right now??
<If, prior to April 15, 2009, we receive an alternative proposal that our Board of Directors concludes in good faith is a Superior Proposal (as defined below), our Board of Directors may terminate the Investment Agreement in order to transact the Superior Proposal. After April 15, 2009, we may terminate the Investment Agreement if our Board of Directors determines it is in our best interests to do so. In either of those events, we will pay the Purchaser a termination fee of $7 million.
“Superior Proposal” means a bona fide written alternative proposal that our Board of Directors in good faith determines, after consultation with its legal and financial advisors, would, if accepted, be reasonably capable of being consummated, taking into account legal, financial, regulatory, timing and similar aspects of the proposal and the person making the proposal, and would, if consummated, result in a transaction more favorable to our stockholders from a financial point of view than the transaction contemplated by the Investment Agreement.>
1) Why would anyone want a company taht has debt at 15% interest..even if it is out a couple of years?
2) The Market tanked today? Just how much a pop is gonna happen when stocks all around you are spiraling downward?
the future ps value if the market feels confident management can
operate the company competently. Making deals to restructure debt
is a positive as long as the operating of the company does not
undermine the forward momentum.
The Feb A 2009 is posted in
www.shortsqueeze.com/?...
It will be interesting to see whn the Feb B comes out..LOL
On Feb 17 05:55 PM JustAnotherLoser wrote:
> anyone know when the next report on the shorted stocks is released?
> will it include data from the past few days? it will help in understanding
> whether a squeeze is still possible or the shorts exited on the timeline
> of the BK rumors.
Thanks...points taken. I think this has some merit which I haven't accounted for:
>>it wasn't until months later - well after $1.50 sp - when most caught onto how "ugly" that deal was -- most were caught up in the merger consummation. That's almost $175mil more a year in debt service they did not have in mid-July 2008. and I fear reworking the bank loans will also be ugly... <<
Yeah, the bank facilities right now are LIBOR plus 200. Sadly Mel won't be getting that on the extension..so more ugly on the way but it needs to be done obviously.
But I think we both agree and which you stated earlier, as volitile spec play, on any given positive news streak, this stock has potention to lift (now that BK is at least put into the future). How far and for how long to reclaim that space, it's anyones guess...but I do see us flirting with a buck sometime in the next 4-6 months...there will have to be some upgrades and higher price targets set in the near future which should help set off a frenzy or two...IMHO
Not long ago Mel talked about going private. Who knows before 2011 if that happens or if Malone winds up just absorbing the company...if so, he gets SIRI and writes down the debt he is assuming now in the transfer...many options to resolve this seeming unsurmountable mountain that has just gone a little farther in the distance. Look, if many of us investors can get some of our losses back in the interim, I'm good with that.
On Feb 17 06:20 PM cos1000 wrote:
> agreement truly makes it a "bridge loan" if someone makes a more
> beneficial offer to shareholders, than this offer represents. Maybe
> their are other parties out their interested, but unable to bid at
> this time. How many shareholders would sell their shares for $2.00
> - $3.00 right now??
>
> <If, prior to April 15, 2009, we receive an alternative proposal
> that our Board of Directors concludes in good faith is a Superior
> Proposal (as defined below), our Board of Directors may terminate
> the Investment Agreement in order to transact the Superior Proposal.
> After April 15, 2009, we may terminate the Investment Agreement if
> our Board of Directors determines it is in our best interests to
> do so. In either of those events, we will pay the Purchaser a termination
> fee of $7 million.
>
> “Superior Proposal” means a bona fide written alternative proposal
> that our Board of Directors in good faith determines, after consultation
> with its legal and financial advisors, would, if accepted, be reasonably
> capable of being consummated, taking into account legal, financial,
> regulatory, timing and similar aspects of the proposal and the person
> making the proposal, and would, if consummated, result in a transaction
> more favorable to our stockholders from a financial point of view
> than the transaction contemplated by the Investment Agreement.>
On Feb 17 06:29 PM Bababooie wrote:
>
> The Feb A 2009 is posted in
> www.shortsqueeze.com/?...;submit=Short+Quote%99
>
>
> It will be interesting to see whn the Feb B comes out..LOL
>
That's actually Jan B. SS's labeling has always perplexed me. They say: Record Date - FebA. Maybe they mean thats when they post the previous half month. We never get SI until one half month ahead of the actual number. As in:
Date Ratio Shares
JanB 01/27/09 10.70 271.93 M
JanA 01/12/09 6.00 219.63 M
DecB 12/26/08 5.00 214.74 M
DecA 12/10/08 5.10 263.77 M
NovB 11/24/08 5.80 263.15 M
NovA 11/11/08 5.50 270.26 M
FebA just closed on the 13th (ish)...we won't see it until probably Feb 26/27...
amen bro...
That being said the only days I have not followed the stock are when I was flying back from deployment. Being 8 hours ahead I used to watch the ticker and read these threads while in my rack. Since getting home I have watched it every single day. (except for day of the fire)
I know much more about what to study when looking at other stocks. (I sold a position I was up in today because they are going to issue 45million more shares to cover debt)
LMAO...thanks for the analogy...and so true so true.
well said and still LMAO.... thanks
On Feb 17 06:38 PM cos1000 wrote:
> By the way 163888, I am after all in this to make money, as are others
> here. I also don't think you were talking about me because I have
> not projected big pops in SP as you know. It is my strategy to play
> the ups and downs as I see the MM's do, to improve my base position
> as I have clearly stated before. The shares I sell and those that
> I buy back are all part of the dance that is the market. I may affect
> the price, but I do not control it. On a good day I try to move
> with those that do. It just a strategy for making money in the market.
> Predicting stock price is for some one else, moving in real time
> with the stocks price and momentum and making trade decisions based
> on that interpretation, is every investors prerogative. This stock
> has taught me that it is not a buy and hold equity... to many moving
> parts that can come up and bite you in the arse on any given day..
On Feb 17 06:39 PM sl62 wrote:
> Baba..
>
> That's actually Jan B. SS's labeling has always perplexed me. They
> say: Record Date - FebA. Maybe they mean thats when they post the
> previous half month. We never get SI until one half month ahead of
> the actual number. As in:
>
> Date Ratio Shares
> JanB 01/27/09 10.70 271.93 M
> JanA 01/12/09 6.00 219.63 M
> DecB 12/26/08 5.00 214.74 M
> DecA 12/10/08 5.10 263.77 M
> NovB 11/24/08 5.80 263.15 M
> NovA 11/11/08 5.50 270.26 M
>
> FebA just closed on the 13th (ish)...we won't see it until probably
> Feb 26/27...
Carry on.
Good points. And just what we needed...the market to turn sour this week! Just our luck.
Cos1000...
Per usual you're on the fine print. Interesting language and more support for less buying just yet in earnest from bigger players today (just as in broader market---still sitting on hands and cash).
Personally I doubt anyone will be offering SIRI anything! With Malone, it was Ergen and with Ergen, he would own SIRI today and Mel would be in retirement...also another side there. Did you post that Ergen ofered Mel 1.37/sh for the company in Dec...that he rejected? Hmmmm. That's exactly what Mel paid for his 2M shares in August. Coincidence? Maybe, maybe not. But I don't know what Mel and BOD are thinking...there is no one else that will come in like this and leave current management in place. But maybe it made them feel better... Another point that is a little more weird (to extrapolate) is your allusion to Malone's preferred status to protect from liquidation. And then this timeframe. You don't think for a minute that Mel and BOD would still leave BK in the mix until 4/15 do you? And just decide against this, give Malone his 7M and just file? Thus keeping SP in the mud until 4/15 now? I say this very quietly so no MSM gets the notion LOL...I know I'm just hallucinating...maybe a little too shell shocked...
Great sift work. Thanks for your efforts...
Not today!!!
Get over it money managers. At the point when you decide to stop abstaining from buyng, hey what a concept, we might just stop testing the lows and move higher..."yeah but then the mean shorts wil come in an take my money...booohoooooo"
Sorry. I rant therefore I am....
S&P places Sirius XM ratings on watch positive
Tuesday February 17, 6:48 pm ET
S&P places Sirius XM Radio credit ratings on positive watch after Liberty Media investment
NEW YORK (AP) -- Standard & Poor's Ratings Services on Tuesday placed its 'CCC' creditworthiness rating on Sirius XM Radio Inc. on CreditWatch with positive implications, after Liberty Media Corp. agreed to make a $530 million investment in the satellite radio provider, saving it from bankruptcy.
Coming from where it was it's positive news no matter what! Besides....Vito and Nicky need jobs too!
Also..I take away that Malone and his board must have seen someting they like to warrant taking this negative:
S&P said Sirius still faces significant debt maturities in 2009, with $350 million of XM bank debt coming due in May and $227.5 million worth of XM 10 percent convertible senior notes due in December.
In addition, Standard & Poor's believes the company may encounter significant obstacles in meeting its 2009 financial targets of $300 million of EBITDA and modestly positive free cash flow, considering the sharp decline in U.S. auto sales and the weak retail consumer electronics market, which may slow subscriber growth.
But S&P said it may upgrade the company's corporate credit rating one notch to "CCC+," four notches above default, if Sirius demonstrates progress toward achieving sustainable profitability and positive discretionary cash flow, and addresses its sizable remaining 2009 debt maturities.
Separately, S&P said Liberty Media's 'BB+' rating, which is one notch below investment-grade, remains on watch negative in the wake of its deal with Sirius XM.
"Liberty Media's investment in Sirius XM currently does not affect our prospective rating outcome following the split-off of LMEI," said Standard & Poor's credit analyst Andy Liu in a statement. "We still expect to lower our rating on Liberty Media to 'BB-' with a negative outlook. However, given that SIRIUS faces maturities above and beyond Liberty Media's investment, as well as significant operating challenges, a further financial commitment by Liberty Media could affect our rating on the company."
Might Mel be holding some incredible Q4 numbers which go against the sluggish economy and the streets thoughts?
I like your thinking. I too am getting the feeling that Malone saw something or knows something from Mel that made him and his board salivate. There has to something in this deal that hasn't been publicly voiced yet that made him and his board so willing to take the gamble.....which might turn out to be no gamble at all.
A day trader constitutes trading the same stock more than 3 times within a 5 business day period if your account has less than $25k.
On Feb 17 04:45 PM mogami_99 wrote:
> Hi, Since I am certain SIRI is a long term increase I think it is
> ok to play the ups and downs in order to increase my overall position.
> It went from .22 to .15 without me. I made no transactions today
> but watched at least 3 times where I could have improved my position.
>
> I am not a day trader so I am not allowed to sell a stock and then
> rebuy it more then 4 times in 1 week.
i was referring to the 5 satellites that the XM subsidiary has thats reportedly worth around 2.5-3.5 billion dollars. From what earlier numbers state XM holds 2.1 billion of the debt and SIRI holds 1.1 billion. Simple math equates this to a soon unneeded group of assets that could be sold to clear its obligations once all XM stations are streaming through SIRI's, as to not disrupt service to the XM customers. Its probably close to happening but not quite there yet. Whatever was discussed i think these assets are whats at play and what will ultimately clear SIRI's debts.
You may have missed this part of the puzzle:
The preferred stock will be issued concurrently with the funding under the XM Credit Agreement described below. The rights, preferences and privileges of the preferred stock will be set forth in a Certificate of Designations to be filed with the Secretary of State of the State of Delaware. The preferred stock is convertible at any time, at the option of the holder, into shares of our common stock equal to 40% of our outstanding common stock (after giving effect to such conversion).
The holders of the preferred stock are entitled to appoint a proportionate number of our board of directors based on their ownership levels from time to time. The Certificate of Designations also provides that so long as the Purchaser beneficially owns at least half of its initial equity investment, we will need the consent of the Purchaser for certain actions, including:
the grant or issuance of our equity securities;
any merger or sale of all or substantially all of our assets;
any acquisition or disposition of assets other than in the ordinary course of business above certain thresholds;
the incurrence of debt in amounts greater than a stated threshold;
engaging in a business different than the business currently conducted by us; and
amending our certificate of incorporation or by-laws in a manner that materially adversely affects the holders of the preferred stock.
The preferred stock will, with respect to dividend rights, rank on a parity with our common stock, and with respect to rights on liquidation, winding-up and dissolution, rank senior to our common stock. Dividends on the preferred stock are payable, on a non-cumulative basis, as and if declared on our common stock, in cash, on an as-converted basis.
3
I am long in Sirius and if 1.38 a share is a much better deal then what they got today. I think you are right on the money. 1.38 a share for 3.5 billion shares makes this enterprise around 4.5+ billion. Basically we sold 40% of the comapny today for 530 million making our enterprise value around 1.3 Billion. Looks bad to me.
On Feb 17 03:28 PM amibankrupt wrote:
> Mel was offered $1.37 per share in Dcember by Charlie Ergon ... was
> not that a better deal than the one they did today.
>
> Mel sold the shareholders for his own interest and EGGGGOOO
1. I sell not a single share until I see the Q4. Im not risking fighting for my average again. Im happy were it is at. If it dips enough, I'll only add.
2. When Q4 rocks some socks off, May debt plan will be out by then, or sooner. That will be resolved. Probably get a better rate than 15% Im sure. Now that Malone is aboard.
3. Dec. bonds will be extended, converted for shares(hopefully), or paid off with cash. I dont think Malones going to let the last bit of Dec debt. mess up their plans. Either way it gets done.
4. Economy starts improving by Q1 of 09, hopefully. They actualy make a profit this year, with synergies, and debt resolution, maybe even liquidating some of XM's assets.
6 billion is the end dilution.
Reverse split, remove shares.
New shares are debt free, and from a profitable company. There are now too few shares available to hold an effective short.
SP by end of dilution should reflect the market cap in realistic measures.
If that happens, these buy in levels here might provide your retirement.
I believe in the product, the backing it now has, and its ability to compete for dollars in this environment.
Iphone app, packaging content with Direct TV...
I dont see why not. The only issue with me was always can the stock survive to see these days. Still an issue, but its looking better. This is a great day in this stocks life, lets not let some bad market action sour that.
Liberty Media and John Malone - face it, there was no better deal that could have happened for SIRI shareholders. The alternative to this deal today was a complete wipeout of all our investments - period.
Questions are - what are all of John's motives for doing the deal. The obvious one of shafting Ergan was sure to satisfy John on a primal level. Man that Ergan is one cheap SOB, shrewd, but tight as a nun's .... habit! A deal with him would have been just as bad as bankruptcy for us shareholders.
Now, my speculation as to the real motives for Liberty jumping into this deal, beyond the obvious financial benefits they received, is that they see great long-term potential in the sat rad media. I also think that there will be technological breakthroughs to enhance the synergies of the sat rad and sat tv businesses in the future. Malone is very shrewd too and he's not putting his company's hard-earned money at risk on something unless he sees long-term benefits. The man's a business visionary. He knows Siri is here to stay, that once we get out of this depression we're in, it will thrive as a lucrative business.
Slam dunk best deal we could have hoped for - not even debatable. Oh and all you Mel bashers, true he made a ton of mistakes to get us to this point, but he had one last grenade to lob at them BK bastards before they stormed the foxhole, and he survived. Got to give him tons of credit for that ...
So I guess we need to bow down to your 197 Comments....As if that really means something. I don't really care if someone posts their 1st or 10,000th...If it benefits us all ( or even just one Common) then they should be encouraged to speak up. The last thing this site needs is some "A- hole" discouraging people from having an honest debate with reliable information. If you are so confident that you have all of the answers, why are you wasting your time on this site? ... get off and go make your millions. I feel better; I'll take my 4 comments and go away now.
jswede 197 Comments hey Blue -- this SIRI discussion started a long time ago. more than 33 posts ago...
I'm talking to Relmor, cos, sl etc... those who have been around Feb 17 04:54 PM |Report abuse| Link | Reply
you mention reverse split. How many 1 for 10 or 1 for 50
koop
On Feb 17 09:36 PM relmar2003 wrote:
> Expecting the market to go up tomorrow. At some point the dollar
> will tank so bad, the market will be seen as a good holder of value
> compared to bonds. Why not risk a stock at a 5 year low, vs. buy
> a bond that isnt paying interest. Same as the mattress. And we
> know people dont like putting there money under the mattress. Investors
> like to invest. And when bonds are worthless, they put their money
> elsewhere. If we can get a Sirius rally to coincide with a market
> rally, whatever the cause, I think we can see some decent gains.
> Heres my plan now.
> 1. I sell not a single share until I see the Q4. Im not risking
> fighting for my average again. Im happy were it is at. If it dips
> enough, I'll only add.
> 2. When Q4 rocks some socks off, May debt plan will be out by then,
> or sooner. That will be resolved. Probably get a better rate than
> 15% Im sure. Now that Malone is aboard.
> 3. Dec. bonds will be extended, converted for shares(hopefully),
> or paid off with cash. I dont think Malones going to let the last
> bit of Dec debt. mess up their plans. Either way it gets done.
>
> 4. Economy starts improving by Q1 of 09, hopefully. They actualy
> make a profit this year, with synergies, and debt resolution, maybe
> even liquidating some of XM's assets.
> 6 billion is the end dilution.
> Reverse split, remove shares.
> New shares are debt free, and from a profitable company. There are
> now too few shares available to hold an effective short.
> SP by end of dilution should reflect the market cap in realistic
> measures.
> If that happens, these buy in levels here might provide your retirement.
>
> I believe in the product, the backing it now has, and its ability
> to compete for dollars in this environment.
> Iphone app, packaging content with Direct TV...
> I dont see why not. The only issue with me was always can the stock
> survive to see these days. Still an issue, but its looking better.
> This is a great day in this stocks life, lets not let some bad market
> action sour that.
Anyone seen this link form D Jones.
www.djnewsplus.com/art...+
koop
On Feb 17 09:50 PM koop127981 wrote:
> relmor,
> you mention reverse split. How many 1 for 10 or 1 for 50
> koop
See how many of the 271million shares actually did cover.
On Feb 17 06:37 PM mogami_99 wrote:
> Hi, Yeah hard to learn anything from that since the days to cover
> is 11. with recent volume it's more like 2
>
>
> On Feb 17 06:29 PM Bababooie wrote:
I bought some today at .18 and have this nagging feeling we're heading for .12 again (or lower). Hope to heck I'm wrong but I can't help but worry we'll be range-bound between .10 to .15 for a long time.
On Feb 17 09:39 PM relmar2003 wrote:
> I meant Q1 of 2010, not 09, sorry. I was talking about next year
> in that sentence. I will also ammend I might sell shares if there
> is a ridiculous surge. But only a percentage.
By the way, the 8-k says $530 total, with $280 (250 +30) phase 1 and $150 phase 2. That's $430 million, where is the other $100? It's unclear what LMDIA pays for the stock, but I'm guessing that's it.
On Feb 17 10:00 PM danny10 wrote:
> I can't even believe the WSJ articles. This was amazing for a company
> such as SIRI to get this kind of a deal done in these market conditions.
> The press just keep bashing and bashing. I love this product and
> believe this stock has real potential b/c it is a must have service,
> but the big boys won't let this stock ever move forward.
>
Well said! I locked in with a life sub back in Dec. I got my free internet and no more monthly payments. BTW...you can reset the life sub 3x, So no need to worry if your radio dies with the life sub, they will let you transfer it to a new device ,
I also think you are on to something with your prior post I believe the XM sats will be redundant and I'm not sure but I think the next Sirius sat is a dual band (Cos, REl and Sl) do you all remember the disclosure of the 500 million credit line from Loral space systems inconnection with the next sat It might have alluded to its dual band capability? I believe that the next Sat will be state of the art and can transmit digital video as well as audio. Maybe you are right, what Malone wants is the XM sats which if so he got them for cheap, Maybe his company will lease space on these sats once the new Sirius sat arrives I believe next year since they will be redundant.
There's been so much today to digest and to think about. I increased my position by 100,000 shares today and put them away for the long term. As I said before, I am not a day trader and my time horizon is five years or more with this stock before I would ever consider selling any part of my portfolio.
I do believe that at some point before the end of the year we will see a reverse split if the stock price isn't one dollar. this notwithstanding the option activity that was disclosed in a prior post. However I don't fear this as I once did, its just that this company still has a lot of enemies, but we just picked up one hell of a friend,
I would like to thank Cos, Rel and Sl for some amazing posts and of late Asm6, Mogami and connorport, we truly have a wonderful group. I wish I wasn't so busy with two projects that I am involved in at work which are consuming my time and have limited my ability to respond to your posts but I do read every one of them.
"Someday we'll look back on this and it will all seem funny."
Thanks for the mention, We, will continue to man our posts and keep as much real info rolling as we all can, No need to worry...get your projects done, Will look forward to reading your posts after digestion of what you get to read. Have a great night...remain strong.
On Feb 17 11:43 PM kssmcs wrote:
> Maybe my numbers are off or I'm just out in left field here. If
> 530 mil is worth 40% of the company, shouldn't the value of the company
> be at least around 1.325 bil?
A bit of history about myself for those that may be interested...Have been reading this message board (and others) for months (BTW..sincerely appreciate the more insightful and informed comments from those whom it thus applies)...Originally bought this stock back in June 08....figured I could make a quick buck when merger went through (Thank you Jim Cramer for the idea)...obviously that didn't work out......however during the waiting period I bought a new truck (sat rad equiped) and realized what a wonderful product SIRIUS is...no more lugging around CD's, downloading MP3's, or searching for a station that MAY be broadcasting a game I want to listen to....it's all there and the technology "actually" works, no mater where you are....I realized that this product is not about Stern or Oprah, or any other high priced talent, it's not even a niche product as I originally envisioned....it's about choice and convienence...and once you have it, you don't want to be without it....kinda like cell phones were in the beginning (without the glitches and high price).....So, as a bonified (and terrified) Sirius investor....here's my thoughts on our current situation.....
First off, what's with all the shock and awe over Mel's decision to secure a 250Mil loan at 15%....does that really seem so outrageous in today's enviornment?...I mean look at what Buffet is getting for a loan these days...300M to Harley Davidson at 15%....those guys that make bubble wrap (truly a product we can't live without) are paying 12% for 150M...GE is paying a 10%dividend+ a 10% premium on 3Bil worth of prefered stock he now owns.....and what about our wonderful friends at Goldman Sachs, paying a 10% dividend on 5B worth of prefered shares + 5B common shares...now that's a serious interest payment (perhaps we should ask Wienkes what he thinks. Seems to me we received a pretty fair deal...
Now let's consider the 280M "purchase" for a 40% stake...considering Malone could have bought the whole thing over the weekend for only 351M, it looks to me like he paid a premium....in fact, if we do a little math...280Mil for 40%= 700Mil market cap....calculates out to about .20/share....pretty interesting how that is about where it traded today.....To sum up (in my opinion) .20 is now the base line folks....should only go up from here!!!! [In the interest of joyful disclosure, I'm averaged in and happily optimistic at .21)
mogami_99, the problem with being bought out and taken private is you wont be able to touch it again until the PPS is being offered at 30,40,50 or more. When the company is making money hand over fist. I dont know about you but I want that 30,40,50 or more. We are so close now to breaking through to that profitable place I could smell it. The last thing I want is to get peanuts on something that if I wait another 3 or 4 years I get alot more. "jswede" thinks internet radio will make this difficult, I cant disagree more. He forgets there is a reason SIRIXM is not into the internet more. Ask yourself why is that, it really would not be that difficult. Heres a clue have you ever wondered why most of the content you can get on the internet from SIRIXM is not music. jswede forgets Slacker cant make any money ether and is alot further away from that then SIRIXM is. He forgets that Pandora just said they would have to file bankrutpcy because of what? Thats right you know royalties. Internet radio has alot of problems to solve before they can even begin to solve the royalty problem.
jpau, While I agree this deal sucks. Not only do we give him 15% on the money but 40% stake in it also. The only thing I can say is at least it is not as bad as the share holders got in 2000/2001, they really got screwed. I will also say I really want to know what happen to the 360 million in COH, I will say this, If they come out and say they had 360 million in COH plus another 60 million or more in FCF from the 4th quarter I am going to be pissed. First at the press then at Mel for not coming out earlyer and saying something. If he did all this bullshit to launch a satllite in the fall. I think he should have to do some explaining.
Not that bad, because the amount isnt that high. And as the new poster was saying, good first post by the way, its comparable to the market. ONce again, cos1000, sl62, i fail to see where this deal "sucks". Ther merger deal "sucked", thats for sure. Getting wipeout by Ergen would have "sucked". Going bk would have "sucked". This deal resolves 09 debt, for the most part. Who knows, maybe Ergen was buying up debt, when he heard Malone and Sirius were going to partner up. Before they knew it, maybe tipped off by Clayton, Ergen owned the bonds they were going to turn around and begin buything themselves(Malone). Thus throwing a wrench in the plan.
in 09 we will see our first positive cash flow...If hes wrong, then he failed...Not before..He gets to the end of the year for me, and maybe Q1 of 2010.
Remind me, exactly where did I say this deal sucked?...
watching early action....are you seeing an early AM attempt to set up for a quick drop today and try to scare more shares out.
Cramer got away with one yesterday because he was off of Mad Monsy. But he came in anyway EOD to 'opine" on the negativity of the market. So obviously he was able to skirt talking about his beloved SIRI...I'll be watchng today to see if he's a man or not. No high hopes...
He still managed to make a casual reference to the fact that SIRI shareholders were up yeterday on the news.
You didn't ask me but I'll chime in. If I just use premarket action, there is no huge pump and low volume..which tells me I wouldn't expect any major dump today. And as I've said before many times day 2, after real news (not rumor) can be better than day 1.
Did he? Well that surprises me. Just a casual reference or any meat on it? He knows at some point he's going to be forced to address this on his clown show...in depth....
Second the deal sucked which is another reason you are only seeing the PPS at where it is. I have always said I had no problem with dilution as long as it took out debt. You know why that was right, because then it takes the debt along with the interest payments out. That is getting something for dilution. We got nothing from this dilution because the debt is still there and so are the interest payments. The only thing this dilution got us was time that was to high a price to pay for time. Now I am sorry but 530 million is not that much. As an example I am sure you could find 10 to 15 thousand investers in the stock that have at least as much in this companys stock as I do, that would have gladly forked over another 15 to 20 thousand or more to get a piece of that kind of action. Hell I would have offered a hundred grand to get a piece of that.
Third, like I said if they had the 360 million plus 60 or more in FCF from the 4th quarter, I think many more then just a few are going to be wondering what the hell happen. For that I guess we will have to wait till the 23 of Feb when they announce 4th quarter results.
Finally you left the last part of the statement out from that Mel comment ...........AFTER CAPEX ...........He said they would be FCF positive except for CAPEX. In which he was talking about the satellite they are planning on launching in the fall of this year. (a satellite mind you that they dont have to launch until at least 2012 because the ones in orbit already have lifespans that take them into 2015.
real casual...as they were pulling away to a commercial if I remember correctly...almost like he was giving a backhanded compliment.
You know I respect your opinion. But you say this deal sucked? Compared to what? Ergens deal? Bankruptcy, where this SP right freaking now would be .0109? Now based on the actual numbers, is it ideal?...no way. Although, as I have said, considering the party with whom it was done, I have no problem with him having 40% of this company. Malone's a winner and there are plenty of potentialities for the future because of this new relationship. And if he got a helluva deal, why do I care? SIRI's options were few and far between. Mel waiting as long as possible to get a better deal on the rate but as someone pointed out here, who do you think right now is getting any money for less than 10, 12 or 15%. The answer to that is no one. I hear your argument about COH and there is always timem to reconcile what might still be available after the Q...and possibly use more of that than expected therby bringing down the Malone principal. But don't they stil have the sports payments? Maybe that's where a prtion of COH is going. Also, IMHO, they should be keeping at least 300M of COH at all times. No less or at very least 250M. So I don't know how much they could have used as you describe...
Also you suggest why didn't the SP go higher yesterday. I outlined much of that @ about 5:30M. Too much selling from the gluttony of back door buys being opened from that ugly Ergen news last week @ .06. AND...the market completely sucked yesterday. Who could have predicted that? Do you think that helped SIRI stock any?
The other problem I have is that I am not to sure this deal is much better then Charles. just after 3 years Malone could just by 51% and we are back to the same position as we would have been with Charles. But this way the burden and risk was mostly on the shareholders and not Malone. If it pans out he buys the remaining 10% screwing us after all that time and investment. If it dosent he gets out with most of his investment because he will get the assets because he controls those loans.
Question is who would you rather having 51% of SIRI. Ergen or Malone. Ergen's a wannabe, an also ran. He will never overtake Direct as number 1 in that space. I would waaaay rather have Malone and glad to have him. IMHO..
Also remember...tis year will still suck for cheaper money. BUT..what happens say next year when things really do become cheaper. Just as homeowners are accuntomed to refiing when rates go down, SIRI could do the same and pay off some of the Malone 15% money down the road. And that's not even considering new top line streams that may develop in the next year/two. And potential sales of assets. If Mels guidance holds up and the Q's keep coming in positive, Mel should be in good shape to explore further options. We just needed this RIGHT NOW and I'm happy with the guy we did it with.
I am not one for conspiracy theories...bu today of all days, my funds wired to my trading account mysteriusly get reversed with all this bottom end action taking place. This is the second time this has happened to me...coincidentally, both times are when the SP was down for no good reason.and I had a buy order in at these levels. Now it could all be coincidence....but it sure feels like something else
If Q4 sucked...then Mel needs to be removed because he outright LIED to all of us. I like Mel as a businessman...but if he LIED...he needs to go!
I think most of us believe eventually SIRI will be taken private. The business model for getting and remaining profitible is iffy IMO. Hence, as we've always said, most likely, as a public company SIRI will always be a spec play for day traders and short-term traders rather than long-term investors. Although the latter group seem to be going extinct in general anyway. But I like our chances in the next few years before that happens to get this SP over 1.37. Iike our chances for that to happen this year. I for one, will never again be a continuous long-term investor in this company since I know the pitfalls and challenges. My goals nearest-term are to maximize this SP in the current turn to gain back as much loss as possible. I'm going to gauge the next weeks of SP action and that will determine how I adjust my strategy to maximize my recovery. At some point I believe this stock, before reverse can run like hell..at least to 1.37 on euphoria. Going private won't be a consideration this year. It might be next year and of course in 2011 when more debt is due. They just pushed back the almost 200M of Dec Notes and they already owe 230M then so now they will owe about $400. In 2012, they have 248M due and now Malone's deal on top of that, so now over 500M. We also have the bank yet to be rolled in the future mix. In 2013, they have 500M due (these three years as you know are all Satellite Radio debt), then is the big Kahuna in 2014 of 1.3B of the XM deal financing. So I'm not kidding myself. I would call the debt load they have over the next 5 years esentially insurmountable (meaning it can never logically be repaid...they can just keep refiing and pushing back, but that makes no fiscal sense and lenders will eventually say no way). Jswede accurately points out their interest load per year is going to be near 200M. This company has bought themselves enough life to get into next year or 2011 and then go private. Malone has stepped in to set himself up for the future. He knows SIRI is headed for BK eventually (or bought up private i.e. by him). This assisstance keeps all these assets in his realm until he/Mel decide when to pull the trigger. Keeps assets away from Ergen, and also out of BK court where anything bad can happen. It keeps the ship floating and moving forward and out of the wrong hands until it's time. IMO, Malone will be the ideal candidate to inherit SATRAD. Mel at his age and place, is not far from retirement and I would give him until next year to get out. Who knows maybe he and Stern walk off into the sunset together in Dec of 2010...and Malone takes the company private and goes on from there....
what do you mean got reversed?
On Feb 18 10:46 AM sl62 wrote:
> 163888...
>
> I think most of us believe eventually SIRI will be taken private.
> The business model for getting and remaining profitible is iffy IMO.
> Hence, as we've always said, most likely, as a public company SIRI
> will always be a spec play for day traders and short-term traders
> rather than long-term investors. Although the latter group seem to
> be going extinct in general anyway. But I like our chances in the
> next few years before that happens to get this SP over 1.37. Iike
> our chances for that to happen this year. I for one, will never again
> be a continuous long-term investor in this company since I know the
> pitfalls and challenges. My goals nearest-term are to maximize this
> SP in the current turn to gain back as much loss as possible. I'm
> going to gauge the next weeks of SP action and that will determine
> how I adjust my strategy to maximize my recovery. At some point I
> believe this stock, before reverse can run like hell..at least to
> 1.37 on euphoria. Going private won't be a consideration this year.
> It might be next year and of course in 2011 when more debt is due.
> They just pushed back the almost 200M of Dec Notes and they already
> owe 230M then so now they will owe about $400. In 2012, they have
> 248M due and now Malone's deal on top of that, so now over 500M.
> We also have the bank yet to be rolled in the future mix. In 2013,
> they have 500M due (these three years as you know are all Satellite
> Radio debt), then is the big Kahuna in 2014 of 1.3B of the XM deal
> financing. So I'm not kidding myself. I would call the debt load
> they have over the next 5 years esentially insurmountable (meaning
> it can never logically be repaid...they can just keep refiing and
> pushing back, but that makes no fiscal sense and lenders will eventually
> say no way). Jswede accurately points out their interest load per
> year is going to be near 200M. This company has bought themselves
> enough life to get into next year or 2011 and then go private. Malone
> has stepped in to set himself up for the future. He knows SIRI is
> headed for BK eventually (or bought up private i.e. by him). This
> assisstance keeps all these assets in his realm until he/Mel decide
> when to pull the trigger. Keeps assets away from Ergen, and also
> out of BK court where anything bad can happen. It keeps the ship
> floating and moving forward and out of the wrong hands until it's
> time. IMO, Malone will be the ideal candidate to inherit SATRAD.
> Mel at his age and place, is not far from retirement and I would
> give him until next year to get out. Who knows maybe he and Stern
> walk off into the sunset together in Dec of 2010...and Malone takes
> the company private and goes on from there....
All of a sudden my account info may be wrong....keeo in mind I have been doing this for several years with the same bank accounts. I am beyond angry right now...I probably missed my price today because of this BS!
On Feb 18 11:12 AM asm61064 wrote:
> sl62,
>
> All of a sudden my account info may be wrong....keeo in mind I have
> been doing this for several years with the same bank accounts. I
> am beyond angry right now...I probably missed my price today because
> of this BS!
You miss one important point here in you post about going private...which i do not believe will happen. While they have essentially rolled the debt back to a later time...the assets that XM holds can be sold off to retire a VERY significant portion of the debt they have, as soon as they figure out how to use the SIRI equipment to transmit both sets of signals, if they haven't already done so. If you retire a significant portion of this debt....and continue to add subs...you are looking at a business model that many would JUMP at to purchase. Malone sees the forest through the trees...he is hedging a bet here, and wins either way!
Not sure about ownership issues. Yeah, I did include possible asset sales as possible solutions...we'll just have to wait and see...awful lot of debt though as we know. My main point is though, I won't be long all the way through (not short cause I can't) but just short-term long in and out. This will be a volitile stock as it has been (as you mentioned).
People with knowledge of Liberty Media say Malone and Maffei believe they're investing in a vastly undervalued asset. Malone, a billionaire media maven, for years has been enamored with satellite, which he considers a cheaper alternative to cable TV and phone service. Under his agreement with Sirius, Malone's company will invest up to $530 million and could take a 40% stake in the company, though it is blocked for three years from taking a stake larger than 49.9%. That could give Malone, who joins the Sirius board along with Maffei, the time he needs to make Sirius a working part of larger satellite ambitions.
Malone, a Yale-educated engineering PhD, hasn't said what those ambitions are, but he has a reputation for thinking several steps ahead of his peers. "If there is something to make out of all of this, John Malone probably has it figured out already," says Jimmy Schaeffler, chief executive officer of the digital consulting firm Carmel Group. For starters, Malone's Liberty Entertainment unit owns a 48% stake in DirecTV (DTV), the nation's largest satellite TV operator, with 17.6 million subscribers. DirectTV already offers music from the Sirius XM service, but it could market the products to customers for use in their cars at a fraction of the current $12.95 monthly subscription fee for Sirius XM. Liberty could also harness unused satellite spectrum controlled by Sirius XM to offer more channels of video.
An equally intriguing prospect is how Sirius might fit with Liberty's 37% stake in WildBlue Communications, which offers wireless broadband for $49.95 a month to mostly rural customers who can't get high-speed Internet access from a local phone company. The service currently has 380,000 subscribers, a 10% increase in the last six months, but could likely do much better if it was marketed alongside Sirius radio.
Down the road, Liberty and Sirius XM are likely to weigh combining operations, says Larry Rosin, president of Edison Media Research . "I assume that they are going to eventually talk about a merger," Rosin says.
www.businessweek.com/t...
A decent article with some decent views instead of the gloom and doom we always read!