Sirius XM Sends Privatization Signals 32 comments
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In a Wall Street Journal Interview, Mel Karmazin states that he would love to take the company private. The title of the article alone, indicating that Sirius XM (SIRI) is sending signals, suggests that Mel is seeking bids on the company.
“…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…”
There may be several positives to this article. To begin with, a company like Microsoft (MSFT), Apple (AAPL) or Google (GOOG) which has the cash to make an offer right now might be more quick to act as they would have no idea if the opportunity would pass them by in the way of a private offering. Mel has opened the negotiating door to any and all private equity firms.
My feeling is that no matter whether the company is taken private, or taken over, shareholders can expect a minimum bid of 4.00 per share. I base that number on the fact that Mel himself is averaged in the high 3.00 range. To make himself whole, he would seek at least that number.
With the stock trading below a dollar, that would be a 400% premium over the current price. That in itself should be an attractive proposition to Wall Street, and a recovery of the stock price may begin on this news.
Disclosure: Long SIRI.
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This article has 32 comments:
but I hear Wienkes is looking for a good administrative assistant. Hey, don't knock it Jessie; it's a great ground-floor opportunity to learn from a master how to set proper price targets!
Email your resume over to Dr. Mark Wienkes, C/O Goldman Sachs . . . he'll get back to ya . . . .
Bid support is in the 10000 thousand range.
OOO, they got pissed, They brought in the ARCA 30k and now the CINN 30 k to back it up. Those are the manipulated shares. Not 100 percent of them, but those are the trading windows being used to manipulate this stock. They will drop or increase to match volume.
Another trick is the sell at 1, .99. .98, .97 real quick, overriding previous bid points quickly to throw market orders lower. This works very well, been using that trick to keep LEH at 20 dollars till it tanked in 5 seconds. See, they show you LEH at above 12 dollars for months, we all knew it was doomed, but they will only give the shorting window at about 5 seconds. Another nice trick. Look for these.
Best case senario: Any day
Most probably senario:Before Q1 of 2009.
Worst case senario: Before Q1 of 2010.
When calculating what the cost to buy the company is, remove those shares. After bond debt would be paid, those shares would be returned, and the other half bought and then returned. Upon which they would be destroyed and disappear as fast as they were made.
1. Speculation companies(People usually put aside fun money for these stocks(Sirius, etc..)
2. Growth companies.(A little more)
3 Proven winners, value.( Most of your money)
If you already spent your spec money, sink not one more dollar into, at any price. Their are no guarantees, and their is potential for stockholder screwing here, but as Ive been saying if that were true, they would have allowed the post merger jump, let it run up, fill us full of hot air(main stream media would have been very positive post merger) and it would be at like 5-10 dollars right now, minimum. Then they would announce bankrupcy. How the game usually works. They would drive up the price so they could get out of their shares, but there going lower to buy in. Seems safe to me, based on those facts I would assume refinancing was already been approved.
this is a bunch of krapola!
alpha omega your pulling my satellite leg somebaody call Branson
wheres the beef!
(that 46 y/0 shure guy needs some xanax)
maybe goldman "sacks "will buy it or manybe neimans od macys or "sacs" fifth avenue.......now thers a quote .. dream on
maybe its all the work of the geiko!
What is wall streets purpose? To make wall street money. Period. If you happen to make a bit, great, good for you, and if you do you probably will lose it all to inflation anyway later. You get money after its been "used". Banks get ultra low rates, while you get the shaft.
Whoever gets the money first, makes the most on it. Common logic. You have to pay back the FED with interest on all money received from bank loans, etc... Its priced into the money.
You give me – or MEL (or anyone) - the option to grab ($$$) and dash….does one take it? How much money is enough…a little bit more (regardless of the ‘sucker’ that is affected by the decisions.) Kidding…or am I? Is this what happened – cash and dash?
No one knows who MEL is in “bed” with – even if he is sawing logs! The common share holder has purchased enough common shares because they are “buying a popular product” that they believe in AND USE – just like MEL buys talent and sells common shares to make up debt…..
This is the potential bottom line in question for the common share holder….
(Q) Do the upper crust in the SIRI chain of command give a FECES about the common share holders that have purchased SIRI XM shares because the technology ROCKS?
(A) Yes they (SIRI XM upper crust) do…why…..because billions of dollars that have been invested mean CRAZY profits for the privileged (MEL and company)….not the common share person due to the decision that have been made!!!!
This is a better question….does SIRI XM chain of command give a FECES about the investor that has invested into SIRI XM?
If yes…….PROVE IT!!
We could ask - Who makes decisions for SIRI XM? – MEL? Regardless of the shareholders that STILL exist at the expense of decisions made by MEL and the powers that be….where does the common shareholder find confidence in for the future?
This means that those who have invested monetary amounts into what they believe would become the “NEXT BIG THING” are currently left empty with zero return because the “POWERS that be” (MEL and company) have made necessary decisions in which the current shareholders will be the seed bearers of tomorrow’s profiteers - which means the current shareholders will take it in the exit strategy.
You make EXCELLENT points. I have made these points myself. I have gone with the yes, on the is he in bed with the banks, etc...
Does upper management care about the stockholders? That is a good question, because of to this point, the answer is no, he does not.
He talked down guidance, spoke dumb comments, launching aneedless satellite in the midst of coming debt refinancing, and is tight lipped on future strategies other than turning on old receivers and the new best of package, which might make more than you think.
Maybe he doesnt know yet, if he will have to use us again, but let me tell you this.
Tanking the stock, in a way, proves he wont be using us again. If he needed us, and the banks needed us, etc... then they would be pumping and dumping, not dumping and pumping. I believe, and have always thought that it was a transfer of wealth strategy, bullied on him by his large stockholders so they can average down, get new cheap shares, and allow the merger to be paid for by mostly XM stockholders, and anyone who sold stock to this point. The giving of shares so the shorts could continue might have been a desperate act, but it also took away the big jump, and gave Mel want he wanted for his investors(new ones) and handled what GS wanted at the present. GS might want the price to stay low, so they can reconverte the bonds for much lower, like .50 cents, and have a higher interest rate sighting weak consumer and investor confidence in the product(look how cheap your stock is trading at). But it is all very complicated what might be going on behind the scenes, and we will be witnesses and not active participants. We must just gather facts and insert them into the best reasoning/interpertati... of facts. We have some facts. Focus on what we know, and you might be less confused about what they intentions of the stockholders future might be. This is not a light decision, and should be thought over very carefully. You must weight current risk(forget what you have already lost in paper value, its gone, and consider it gone) vs. future reward. At .84 cents, what is the potential to drive is further down from here, vs. the potential for gains on the upside. When you have weighed all the evidence and facts, you might have your answer. Facts.
1. 1st time refinancing came due, they used the stockholder value as leverage, but in using the value as leverage, gave the value a vote of confidence as well. This fact may work to both arguments. I say yes he used stockholder value, but it was mostly XM's, they got shafted ROYALLY. They have much more to complain about. They got no spread, and cheap stock that tanked right after they were forced to receive it.
2. Needless satellite going up in 09. Why put up a satellite if your going bankrupt. Wow i just figured out this is too long. If you read old posts, you will find my views too. But study the facts for yourself. Look at their books. Talk to users of the product. Go to retail stores and see whats going on, talk to employees. Talk to a car dealer and see what he says about it, etc... Call Sirius and file a complaint. File a complaint with the FCC. File a complaint with the SEC, sighting obvious stock manipulation. Start a petition to remove the board, if you dont like them. So much float out their, it would work if properly funded.