OKMONEY

Circuit City's Potential Buyers Offer Hope for Sirius Investors

sl62; I've been long SIRI for a long, long, probably too long of a time. I'd be embarrassed to tell you my average basis. Sirius won the battle, but NAB won the war. Here's what worries me: Sirius said in the annual shareholders meeting PPT it is looking for serious private investment; I read between the lines they're looking to go private. A secondary won't bring the money they need for debt service, let alone debt retirement. Automobile sales are not going to pick back up again. Sirius is never going to get the subscribers they need as a result when added to the basic contraction in the economy. Let's face it Sirius is a luxury item and will be real easy to cut out of any household budget. I don't like companies with a lot of debt, especially companies whose assets are hard to value with a short term debt that very well could render them technically insolvent. How do you value subscriptions that can be terminated, and are being terminated, in a New York minute. How do you value the talent, like Howard Stern; he could turn to coal in a Christmas stocking in a New York second. I know the figures Sirius puts on the balance sheets for these assets, but there's no tried and true way to determine their valuation methodology. Yes there are some analogies like cable TV, but I think our world of "Happy Motoring" is contracting or even dying as opposed to a growth market in TV. The spread between treasuries, CD's and corporate bonds tells me there's little confidence in the future of American business. Mel might get financing but it'll be a bone crusher like the deal ETFC made with the devil, Citadel, in November, 2007: 12.5 % springing lien notes and 20% equity for a song and a dance. Sirius is playing the business equivalent of that popular game we used to play in the infantry: loser dies; winner gets to fight another day and take a chance on being the loser. I know it's a dark thought, but Sirius is looking into a very dark abyss. Barring the president elect telling the American people to subscribe, or Warren Buffett taking a big equity position Sirius's hand may be forced into the world of Chapter 11 financing. There's PR and stigma to consider, but as long a subscribers get their favorite line up when they turn the radio on it won't matter. Look what Chapter 11 financing has done for the airlines. Too many people think the BOD has a fiduciary duty to the shareholders; quite the contrary; the fiduciary duty is to the corporation. At all costs the business of Sirius will be saved and, of course, at the expense of the shareholders. As far as GS goes don't you think they shorted SIRI all the way down? What about the new competition, RaySat and AT&T. Like I said at the get go; Sirius won the battle but lost the war.