GM/Chrysler Merger Could Be Very Interesting for Sirius 102 comments
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If we all thought the merger process of Sirius and XM brought interesting times, imagine all of the comments that will come if Chrysler and GM pull the trigger on a rumored merger/acquisition! One thing that may be certain is that the auto companies can cite a “failing business” as a reason that such a deal should be approved.
For satellite radio, the deal could be very interesting: The biggest XM OEM partner joining up with the biggest Sirius OEM partner. As sector followers are aware, GM has an exclusive deal with XM, and Chrysler with Sirius. Interestingly, the GM deal has clauses that speak to what could transpire if a GM brand were to install Sirius radios, and that may bring about discussion of getting a fully interoperable radio into the OEM channel earlier than may otherwise have happened.
Now, to be clear, the satellite radio deals could play themselves out as currently structured. However, an automotive marriage could also mean that Sirius XM Radio (SIRI) will get a chance at renegotiating the current deals. It is widely known that the GM deal is expensive for satellite radio, and more than one analyst had made reference to that fact. Thus, it would benefit Sirius XM Radio to at least try to better their current deals should GM and Chrysler hook up.
Cerberus Capital owns 80.1% of Chrysler, and 51% of GMAC (the financing arm of GM). One proposal would have Cerberus trading their stake in Chrysler to GM for the remaining 49% of GMAC. It is an interesting proposal. Chrysler sales are way down, and credit markets are tight. The deal would solidify GM’s position as a sales leader. Toyota (TM) has been chipping away at GM for a few years, and sometimes has been known to outsell the biggest U.S. car maker.
If there was ever a time to propose such a deal, it is now, and it may just have a decent shot at passing regulatory muster. The markets next week will be interesting to watch as the government takes a stake in big banks, and big automakers try to find solutions to their sales woes.
Position - Long SIRI, No Position GM
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This article has 102 comments:
Long Sirius
As I understand delisting Sirius would have 180 days to bring the stock back over a dollar. The warning will be issued and then they have to resond in this amount of time. I could be mistaken, but this is how I have heard it explained.
A reverse split is still a long way off for SIRI....
As you have seen about three weeks ago... SIRI got back above $1.00. Then....
The sell-off began... Nearly every stock all over the WORLD went down... Even Businesses with proven strategies, growing consumer bases, and positive balances fell sharply for the last two weeks. So don't think that a reverse split is the only way out for SIRI... Once money begins flowing back through the markets, SIRI will be back up around .80-1.00 range. Then we wait for Mel to announce the financing and...Voila.
By the way, I believe shorts will begin to cover by the end of the week for fear of being stuck after the "Rip your Face of Rally" (as Fast Money would say) due this week....
Just look and listen to the writers, Cos1000, relmor, sl62, 163888... and the others I might have forgotten....
And if you are a Holder of share and need a Cheer Me Up, Read the stories that Killerkaul has been writing, although I believe the battle has slowed this weekend....Maybe it's the silence before the storm....??
omagod, the NASDAQ has delisting rules that have been changed or suspended before. In February, 2003, the last time Sirius was trading at these numbers along with many troubled companies, the announced the following:
... Nasdaq, the US technology exchange, has extended the time that companies have to meet its minimum share price rules, because of market conditions.The stock market said it was suspending for a further year, until December 31, 2004, the requirement that companies with a share price less than $1 ([euro]0.9) be thrown off the market....
In addition Sirius' stock price is not the only criteria for delisting, market cap and the fact that NASDAQ makes money on every transaction will be another consideration. Sirius is regularly in the top 10 most traded companies. The worst that can happen for now is a notice of non compliance with listing criteria. Then is a hearing is filed within seven days, one will be held usually within 30-45 days, then after a decision, the 180 day clock will start.
Nasdaq has already commented about how their has been a dramatic increase in companies trading under a buck during this downturn. I would not be surprised if a similar suspension of this delisting criteria, under a buck, is not put into place to prevent member companies who only have this issue not met. That would not mean that the other criteria for delisting would be suspended, just this one.
The biggest challenge is getting those coverts renegotiated so they don't have to seek protection from creditors.
Careful friends.... the enemy is everywhere..... trying to break us down and infiltrate our lines. Thanks to the new weapon given to us by Seeking Alpha we can now quickly review these imposters posts. Be vigilant and don't give your shares up to anyone.
I've said this before and relmor just said it again recently. The people here who have negative things to say can only say something baseless and stupid. A one or two liner not backed by facts, thought or intelligence. Thanks crocof, for maintaining that flow! Really crocof? The truth hurts? Try this truth on and see if it hurts...you're extaordinarily unintelligent! Sad to say!!! You probably don't even know what reverse is--that's clear. Because if you did you would be able to refrain yourself from saying something so pathetically wrong. Here's a challenge. Maybe crocof, you can be the king loser and try to stand up for yourself (and all the other one line losers who post here). Tell me EXACTLY why SIRI will reverse and when and...yeah, why don't you also give me the ratio they will need to use so it makes sense with their company metrics. Please give me some facts crocof!!! I'll be waiting for your reply!! I won't be holding my breath though if that tells you anything...
A few numbers for reference. It just looks like we're hell-bent on recreating the '02 picture. If so, here are the numbers we will need to hit. One theory is that since we've since gone much higher on the Dow than we were in '02, maybe the equivalent floor is higher--kind of where we are now and were last week. The puzzling part is the Nas never did retrace back to it's 00 highs of 5000 so hard to correlate. Yet the Dow did well-surpass it's '99 high of 11.5 up to 14.1. S&P on the other hand was extraordinarily consistent in both periods peaking just over 1500. So I guess if you, like many, use the S&P as guidance, we should need to hit the '02 lows before we bottom out. Where that will leave the Dow and Nas it would be hard to say exactly, but the trend has been about 50 S&P points per roughly 500 Dow and 100 Nas.
So right now we're 124pts from the '02 S&P low (768 on 10/10/02). This would ostensibly = -1200 on the Dow from here or 7251. The 02 Dow low was 7197.49 on 10/10/02. Hmmmmm. Makes you wonder. But if nothing else food for thought. You can also see by the numbers that in '02 the Dow capitulated with a 1000 pt snap back in 3 trading sessions. And that was back in the days when a 300pt move was extravagant. Today that 300 pt move is a 500-600..so do your own math...question is will we snap back some this week then plunge to the actual low or... "are we there yet?" Either way SIRI plows through like a champion...
Nasdaq
Date/High/Low/Open/Clo...
10/09/02 1,135.89 1,112.08 1,117.14 1,114.11
10/10/02 1,165.83 1,108.49 1,116.76 1,163.37
Dow
Date/High/Low/Open/Clo...
10/09/02 7,500.03 7,282.39 7,499.96 7,286.27
10/10/02 7,560.93 7,197.49 7,286.34 7,533.95
10/11/02 7,901.26 7,540.74 7,540.74 7,850.29
10/14/02 7,915.00 7,745.70 7,848.21 7,877.40
10/15/02 8,255.68 7,883.23 7,883.23 8,255.68
10/16/02 8,232.10 8,013.41 8,232.10 8,036.03
10/17/02 8,318.45 8,038.24 8,038.31 8,275.04
10/18/02 8,331.56 8,147.20 8,287.72 8,322.40
10/21/02 8,547.83 8,230.50 8,320.74 8,538.24
S&P
Date/High/Low/Open/Clo...
10/09/02 798.55 775.80 798.55 776.76
10/10/02 806.51 768.63 776.76 803.92
They are starting to inject money into infrastructure... just like FDR did in the 30's.... instead of "Building" all of this stuff....they are "Re-Building" these things!
I just thought it was a cool similarity
Anyways......
sl62,
Are you being serious when you say "SIRI plows through like a champion"
or are you just cheering like the rest of us??
Just Wondering
lol
Do you think it's a serious chance that SIRI will plow through this week...?
Another question: does the company get any benefit from making use of emergency channels (i.e. during a hurricane) other than free advertising and good will? For example, does FEMA or any other government agency pay for use?
What happened to the royalties lawsuit against xm some time ago?
One final comment: I hope that this company doesn't go private because I want to be in on the profits that will be made in the future, rather than be squeezed out so a hedge fund, etc. can make all the money. My shares are for sale with a "good until canceled" order at $20, not because I expect it to happen overnight, but because I think this company has a great future...
Thanks in advance for answering my questions.
Think, casey, who brought upon the collapse of GM & Ford ? They did.
Throughout the last 50 years, when workers strike, every unions jumped in to join them, as if GM & Ford were their enemy. The government should never give any loan to a company whose workers keep tearing it down. When workers have no loyalty, business won't survive, period.
The next Big Collapse will be Boeing, and its happening now. Get rid of your BA shares while still worth something.
On many message boards people have talked about market manipulation. When the MM's are ready to move a stock up, they can blitz it to the moon before the common investor can react. I've been pleasantly surprised in the past by unexpected (no announced news) moves up in pps. The news seems to "catch up" later after the pop.
Is the following situation an rough conceptual reflection (I fudged the numbers so they are not exact) of what is going on with SIRI and convertible bonds?
SIRI, trading at $2.25/share, needs cash to pay of some XM debt, which they needed to do to merge. They say "Hey we need some cash! Who wants some bonds??" At some points it becomes clear that they will not be able to obtain the necessary cash through standard bonds... their choices are to negotiate a ridiculous interest rate of offer a different type of bond with some other incentive for the bondholder... convertible bonds... Here is where I am cloudy...
A convertible bond is convertible into shares at some point? When? how does the $1.50 figure play into this? What happens if SIRI is trading at $0.50/share when they mature? What has all the mention of the $3.80 or some figure in that area that would be required to be met for something to happen?? Any help or explanations would be greatly appreciated!
RJO
IMO, SIRI has always performed well under their extraordinary circumstances and now in such a crazy market spiral--and continue to do so. Jeez, talk about having 2 hands tied behind their back--and yet here they still are, denying the doomsayers...Bent but nowhere near broken. What will unlock SIRI short-term is the definition of credit easing--which we should start seeing this week. Maybe back to around buck by end of week. The market is receiving the current euro plan/news well today. Now U.S. needs to take the lead tomorrow. Bond/Bank/Credit markets are closed today so it gives U.S. an extra day to finalize then release. They need to be specific. Regardless of what the overall market does right now, what's important to SIRI is a clearing of this credit jam. Alot of things are starting to fall into place. The fact that the whole world is in on addressing this bodes well for a much faster recovery for everyone.
I saw this morning that the Sweden rescue took 4% of their GDP--which they recouped within 10 years. Our current debt is 10T against a 14.4T GDP-- about 70% (highest since the mid 50's btw...in 1950 it was @ 90%). The TARP at full value of 700B = 5% of GDP. It is even questionable if that entire 700 will be needed. By even adding another 500B to that figure for bank injection/gaurantees wouldn't hurt anything at this point--in which all this money should be recouped. The U.S. is not the highest but a still respectable Fitch rated TrippleA. So...wtf...go for it, get borrowing and get this s#%t stablized. It appears the rest of the world is doing the same things.
I don't think that the shareholders that are subscribers are there just for good faith... I think they are there for the radio, therefore I don't think that they will drop their subscriptions.... and the ones that do based on that fact you stated... are just dumb.
Sorry but you're a delusional cry-baby. If you own shares, please sell today and be gone with you so we don't have to put up with your whining. Would you like some cheese with that? Thank you.
Dow +950. Whew...never before seen!
SIRI gets a big atta boy...not bad on 52M...
OK. Now it's time to get SIRIUS! I believe November has always been their best month. So it starts today. Tomorrow we get more news from the gov about stablizing-- then the banks start lending, then Libor comes down, then rates start getting better, then more shorts cover up, then Q3 comes in in-line, then comes Mels upside surprise about EOY subs that he low-balled, then idiots stop posting here, then they announce the refi with a decent interest rate, then more shorts cover, etc..., etc..., etc....
One step at a time but...bring it on!!
Killer................... the ladies away from the Big Blue Dog. We need him at full strength when Mel turns him loose on the scumbags that are holding him back! We don't want his legs getting weak in the home stretch!
Agreed...except the idiots posting here should be at the top of the list!!
still sirius, I saw that also. He brings up some good points, but forgets that the bigest losers are the converts that have no insurance on their investment, and would lose every thing, then the common share holder then the banks and they are not going to fare much better getting pennies on the dollar. That is why the banks holding the loans dont force a company into bankruptcy that shows, they are able to pay them back in full if given a little time. (they may also lose more in bankruptcy protection because they may be forced to low the rates that they had before) The share holder is only taken out if they file for total bankruptcy. If a restructuring takes place then the common share holder still keeps his shares, Most likely at a way lower PPS. That is why alot of times you see the PPS of other companies filing for chapter 11 still at .4 cents and lower, because there is still the chance the get restructuring done and come out on better terms.
So in closing, I will say it again for the 1,000 time, there will be no bankruptcy in the near future for SIRIXM. lets not forget something that most seem to, that SIRI has never missed a payment and that there is no more money being asked for. it is just at most/worst asking for the terms to be extended. THEY ALREADY HAVE ALL THE MONEY THEY NEED. The bottom line is if they cant get the money from the banks then it is simple they just reconvert the old ones. Would they be a worse terms, YES but the savings from the merger are way more then enough to make up for it.
Another 2 bit loser never-been "writer" = Greg Braxton, Times Staff Writer --Los Angeles Times , October 13, 2008 Monday Home Edition
"Satellite radio sweeps Stern off cultural radar; The shock jock now hosts B-list guests for a shrunken audience."
Why must these people write irrelevant nonsense and piffle??? Duh...Greg...I hope Stern crucifies this guy...
www.contentagenda.com/...
Next time...dont be so hard on ol' Aristotle...He was just seen leaving TMF offices with his head shoved up his Arse. Nice job. Better be careful...don't want to offend anyone at TMF. What a bunch of pinheads!!!!
Taxi fleet companies are scrambling to find new cars with these specs.
What an excellent opportunity for SIRIUS/XM to have ALL NY taxi cabs with sirius/XM installs as well as back seat TV HMMM ??
Mel has alot of buddies in NYC, once this happens in NY all other major city TAXI cabs and LIMO companies will follow.
I said it before and I will say it again , the possibilities of satellite technology are ENDLESS. TYLER should look into more detail.
Didn't you just love in his article the part about: poor me, why are people so mad at poor me?...maybe write a coherent article that makes any sense...would be a place to start. Jeez.
163888...
Hear ya. My take is this. Q2, they beat by a penny and had a few other positives in there and nobody cared because all the focus was on the deal, the bond short and the potential default. So we'll see what happens this time. They release on Nov 5. Maybe by that time they will be able to have something good to report regarding the financing--even if still working on it. Mel's lowered guidance will be valuable. But refi news could greatly offset any off news (as long as it's not too grossly off)...Soon, we'll get to see what they've been up to...
Also in general don't know what this is but it caught my eye...
10/14/2008 15:35 Sirius Satellite Radio at Dow Jones Newswires Media and Money Conference
The above number does'nt include Limos and car-services
Now you can see the exposure.
I enjoyed reading the full beatdown you put on that article.....
Part 1: XM took debt in the form of a 7% Exchangeable Senior Subordinate Notes which convert to shares of Sirius Xm upon maturity at a rate of 533.33 shares for every $1000 dollars equity invested in the notes or $1.875 / share. These notes convert to shares at maturity, 2014, providing the stock price is conducive to this. If not the notes must be paid for at par. If Siri SP is $10 its a great deal if the SP is lower than or slightly above convert price, not so good for the holders.
Part 2: Because Bond Holders want what is called a "Risk Neutral" investment in the notes they typically will "Short" the underlying equity while holding the Note. Known as "Convertible Arbitrage". With their being no shares available to facilitate the sale of the notes for the purpose of "Shorting", Sirius Lent Shares to the facilitators of the Notes or Bonds sale to UBS and Morgan Stanley. These shares were priced at $1.50/share to the Bond Borrowers, UBS & MS, hence the immediate drop in pre-merger share price to 1.50. The amount of shares lent at this initial price was 183M shares. There were an addition 78M shares lent that would be sold in the future at various market prices to also facilitate the practice of shorting the stock. When the 7% Senior Echangeable notes mature in 2014, all of the lent shares must be returned to Sirius XM Radio.
Part 3: 13% Senior Notes due 2014, $778 M unsecured Notes (not convertible) from XM Escrow, LLC which merged with and into XM, Inc. when merger was completed with Sirius.
These shares along with the XM's 7% Notes, and another $778M in 13% Senior Notes (not convertible) are the Ugly Deal that Mel talks about. These credit instruments were required for the merger to go forward. It immediately took any chance of a post merger pop out of the stock and caused a precipitous drop from 2.70 to 1.50 in the course of several days. I am sure there are other details that I have not included here but I believe that I have summed it up fairly accurately.
Fed to announce U.S. plan tomorrow @ 8:30EDT. Looks like they're divying up 250B of the 700 for TARP to a few different banks. Now as preferred class, they are saying non-dilutive to common...but we'll have to see. If this is the right thing, we could be looking at another +600 points. The question might be is will they try to sell into it EOD...they tried to sell into today in the morning and got the heisman after about -50 points. Buying is very strong, I can't see how they will overcome it tomorrow. From what I just heard, this totally eliminates counter-party risk. Let the lending begin!!! We could be up all week if this hits the right way. Hey, we were down 8 days in a row, why not now be up 8 in a row. Jeff Macke will be upset if that happens! (lol)...poor Jeff!
Maybe we can squeeze another dime out of the dog tomorrow....
c'mon sl62....
You know we are looking at a quarter....
I'm ready to defend the fort this week!!
I never folowed this up but... I don't think Chrysler ever did anything with Renault??
Anyways... This has nothing to do with SIRIUS/XM and ever article that relates SIRI and cars is BS to me...
renault, an afiliate of amc.
the straight six dates back to the 50's.
in 1954 the nash/kelvinator co. merged with the hudson motor car co. to form the american motors corp. that was taken over by chrysler in 1988.
i believe amc bought the jeep line from kaiser/overland in the early sixties.
the straight six (block), i belive is still used today.in my opinion the best 6 ever designed.
why do i bring all this up, it just breaks my heart to see whats happening to the american auto mfg.
are you american?
how bout this for a bumper sticker "hungry, out of work, eat your import"
The stock will triple today!
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BAD NEWS... SIRIUS WILL STAY AROUND THE .50 CENT PRICE BECAUSE GS KEEPS AND WILL KEEP ON SHORTING THIS STOCK UNTIL IT GETS REFINANCED NEXT FEB. SO THIS STOCK WILL STAY AROUND THIS PRICE OR WILL GO LOWER TILL THEN. THAT'S WHATS HOLDING DOWN THIS STOCK.
THEY NEED TO REDUCE HOW MANY SHARES OUTSTANDING THEY HAVE.. HOW WILL THEY DO THIS?? ??
WHEN THE POSSIBLY GET RID OF GS AND THEIR HOLDINGS.
SO TILL THEN THEY NEED SUB COUNTS!
Sirius-XM Radio Inc. (SIRI) Chief Executive Mel Karmazin said Tuesday that U.S. auto sales will drive $300 million to $400 million in revenue gains for satellite radio next year even if Detroit has an awful year.
Karmazin noted that half the vehicles manufactured in the U.S. in 2009 will have satellite radio installed. If current trends hold steady, he said, roughly half of the buyers for those vehicles will become paying subscribers for XM-Sirius.
"We'll add hundreds of millions of dollars in revenue even if the auto industry sells only 12 million cars, and that's less than people are expecting even in today's climate," said Karmazin.
The remarks came at a media industry conference in New York, where Karmazin also said he's confident that XM-Sirius will be able to refinance roughly $1 billion in debt that comes due next year despite the financial crisis that's weighing heavily on credit markets.
"I wish the debt market wasn't what it was," said Karmazin. "It's very challenging, but we've been talking to our debt holders and I'm confident we'll be able to work something out."
You threatened to kill yourself if the price dropped below .51...That makes your contribution to this board rather neglible and irrelevant. (I'm not saying that my posts are that great, but COME ON!) I'm going to play some chess...bye-bye!
Thank you for correcting me... like I said, I never really followed any of that up and was not thinking back to those dates....
SIRI, go up!, I also saw that I think that makes it the tenth time that Mel said he was ether working on all the 2009 financing or that this Feb. debt. is not a big deal and something will be done on it.
So my question is as always why was there ever any talk of bankruptcy over Feb converts by anyone including the posters, press and analyst. I mean, I am not that intelligent and I have seen this from the beginning, so why didn't the people I just talked about.
LMAO : )
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BAD NEWS... SIRIUS WILL STAY AROUND THE .50 CENT PRICE BECAUSE GS KEEPS AND WILL KEEP ON SHORTING THIS STOCK UNTIL IT GETS REFINANCED NEXT FEB. SO THIS STOCK WILL STAY AROUND THIS PRICE OR WILL GO LOWER TILL THEN. THAT'S WHATS HOLDING DOWN THIS STOCK.
THEY NEED TO REDUCE HOW MANY SHARES OUTSTANDING THEY HAVE.. HOW WILL THEY DO THIS?? ??
WHEN THE POSSIBLY GET RID OF GS AND THEIR HOLDINGS.
SO TILL THEN THEY NEED SUB COUNTS!
IMO, there are a few reasons for the neg articles vis a vis the BK issue.
1. Manufacturing conflict to get consumer attention and promote themselves, site, etc...
2. Nothing else to write about
3. Stupidity
4. Cluelessness --like Rick @ TMF or Doug McIntyre. They only write about the obvious without doing homework or understanding what's actually happening behind the scenes. "Hmmm, the stock is going down, I'm sure they will have to file for bankruptcy." "Hmmm, the auto industry is down, SIRI will have to file for bankruptcy." "Hmmm, 1B in debt is due in '09, SIRI will have to file for bankruptcy." Hmmm, the stock is below a dollar, SIRI is a great candidate for a reverse split." Your basic idiocy...
5. Stupidity
6. Lack of thinking -- similar to some posters here who write one-liners without facts
7. Thick-headedness --basically means they're stupid
8. Makes them feel powerful to write that a company will have to file for bankruptcy --They then go to the bar and brag over beers about the story they "broke".
9. Unqualified to be financial reporters
10. Complete lack of vision
There are more but these are the main reasons...
what move?
btw...today was that conference (10/14) that was mistakenly listed as earnings. Mel was on his good behavior!
Better start giving TMF hell again for not even using any of your posts..!.!.!!!...
Well we are diving back into the realm of good buying.... and i'm about to bust out that Abrams I found while I was kicking in the dirt the other day ; )
How about a tall smurf, I see smurf today as I watch the market. All those cute purple people running around. Kind of like the market, a complete work of fiction.
Sirius is entering la la land again. Look out. Need up days fast, or a complete reversal is close at hand.
Now sl62 will need to do it..... But I think sl62 is on vacation now, haven't heard from him in a while....