Is Sirius Up for Sale? 21 comments
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I was pondering the write-ups Wednesday that surrounded the Denver Business Journal interview with Liberty Media's (LCAPA) John Malone. The one thing that stood out to me was that this was the second time that an invitation was telegraphed to Echostar's (SATS) Charles Ergen by Mr. Malone. I considered Joe Clayton. I considered the fact that he is probably Satellite Radio's biggest proponent. At least he was as CEO of Sirius XM (SIRI).
At one time, Mr. Clayton had estimated that the U.S. market for Satellite Radio exceeded three hundred million subscribers. Mr. Clayton had a vision that was unparalleled by even the most die-hard proponents of Satellite Radio. Mr. Clayton now sits on the Board of Directors for Echostar and it is no secret that he left the helm of Sirius XM unwillingly. It would not be a stretch to conclude that Mr. Clayton has had a few discussions regarding his optimism with Echostar's Charles Ergen. Perhaps it is just that reason that Mr. Ergen attempted his hostile takeover earlier in the year.
Despite this, Sirius XM seems all too willing to extend a hand of friendship. Or so it would seem. Moments ago Sirius XM announced that it plans to adopt a shareholder rights plan. The plan is certainly beneficial to shareholders and I would expect its adoption to take place at the annual shareholders meeting next month, but all too often these plans are adopted to prevent a hostile takeover, such as we saw with Mr. Ergen.
The press release from Sirius XM clearly states that this is NOT the reasoning behind this, and still other stories have been told describing the many benefits of Sirius XM's tax loss benefits, but I am left wondering, given the circumstances surrounding the timing of this plan. It certainly wasn't mentioned in the company's SEC filing just one week ago. This item has been added to the agenda. Why now is the company so concerned with shareholder protection?
It is beginning to look to me as if Sirius XM Radio is for sale, at a very high price, mind you, and to a very specific suitor. The shareholder rights plan means that the asking price of Sirius XM just went up considerably. The only question remaining in my mind, is how much Mr. Clayton and Mr. Ergen are willing to pay. Six billion dollars in tax losses alone is a great place to start.
Position: Long SIRI
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This article has 21 comments:
It protects us from short sellers, and from investment opportunist that will purchase more than 4.9% of sirius stock. If more than 4.9% of sirius stock is purchased and / or acquired by an investor larger than 4.9%, that block of stock becomes diluted (what the ratio is going to be I don't know specifically).
What this will do is it will actually increases the overall value for individual investors and protect the overall total shares from dilution which would effect everyone else as a whole.
It appears to look as if though an R/S is very near to happening, if this vote is passed, then it will consolidate shares making the value stronger per share, and prevent heavy dilution from re occurring from short sellers, or from people profiteering from short gains.
This is a great plan for the little investor.
While May 11th is the magical date of record for stockholders to receive these rights, what isn't clear to this writer is whether or not any stock bought on let's say-----May 12th or after will receive the rights. (
Another way of utilizing rights and warrants is for them to trade on the public market as a company's stock price increases and utilized as a vehicle for raising funds.
When a company needs funds but doesn't want to be beholden to a creditor this is a great way to go----I would seriously encourage the BOD of Siri/xm to consider this use of rights and warrants also.
jay
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"If that happens, each shareholder will receive the right to buy a 1/1,000,000th of a share of preferred stock for $2. These fractions of preferred shares carry the same voting power as 1 share of common stock."
Quote from Rights plan...
" Under the rights plan, one right will be distributed for each share of common stock of SIRIUS XM outstanding as of the close of business on May 11, 2009."
At $2.00 per right we are going to need a big move up for it to have any effect.
If they think the stock is going to get up to the point current shareholders will purchase rights so they can vote them it would be huge for those of us that averaged down so our PPS is around todays level.
www.satwaves.com/satwa...
On Apr 30 10:00 AM wcorowitz wrote:
> the numbers for the 1st quarter must be good enough to attract buyers.
> I need to get in now before the price goes up.
It is beginning to look to me as if Sirius XM Radio is for sale, at a very high price.
Ps just a simple
investor doing the same home work
dido to you Brandon, keep up the good work
jay
LONG SIRI
On Apr 30 11:35 PM wholesalecd wrote:
> I bought at .07 and sold at .40.........made a killing....now i'm
> shorting it.....everyone let's get in on the short game...If you're
> with me let me know and we can all short together and drive the price
> down....Then when it get's around .15 we can buy it back again and
> cycle it all over.
>
> jay boy billy
Shorts must have had INSIDER information of the SEC filing that came on Monday 4/20 of one more billion dilution.
That is why they bushed it up to .50 on Friday, and .62 on Monday early to SHORT it quickly in 2 hours to .40.
They new about the Filling that day and they were sure to CASH on quicly. > 130 Million share traded that day.
Do the MATH and see how SIRI insiders with HEDGE funds made that day
On Apr 30 11:32 AM wcorowitz wrote:
> They need to get over a dollar before they do a R/S. If not, then
> it will just be shorted back to under a dollar. Iphone app and a
> good quarter should get this stock price close to if not over a dollar.
> Why did the stock get to .63 on no news? If it went to .63 for no
> good reason, then on the iphone app. and a surprise quarter that
> shows at least break even or some profitability, this stock should
> take off. The estimates are for a one cent loss, then why not surprise
> and beat the estimates by a penny or two.
Jay Boy Billy
On Apr 30 08:55 PM siriusaldo wrote:
> Brandon, it is refreshing to read someone clear mind analogy soon
> to be fact, your homework is well found congratulation to you in
> advance,
> It is beginning to look to me as if Sirius XM Radio is for sale,
> at a very high price.
>
> Ps just a simple
> investor doing the same home work
> dido to you Brandon, keep up the good work
On Apr 30 11:32 AM wcorowitz wrote:
> They need to get over a dollar before they do a R/S. If not, then
> it will just be shorted back to under a dollar. Iphone app and a
> good quarter should get this stock price close to if not over a dollar.
> Why did the stock get to .63 on no news? If it went to .63 for no
> good reason, then on the iphone app. and a surprise quarter that
> shows at least break even or some profitability, this stock should
> take off. The estimates are for a one cent loss, then why not surprise
> and beat the estimates by a penny or two.