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Intrinsic Value Investing: Recognizing Potentially Mispriced Stocks

After reading all the articles and finally getting to the 8-K, I found I was wrong about the 15% being paid by Malone and not SIRIXM. I would say that being the deal I would have liked to be in liberty/Malones shoes just for having the credit they get 40% of the company and dont have to pay anything for it.

Intrinsic Value Investing: Recognizing Potentially Mispriced Stocks

Also from the article I just put up we can also gather that SIRIXM was growing not only in the 4th quarter but in the 1st quarter so far.

Intrinsic Value Investing: Recognizing Potentially Mispriced Stocks

Once again read this:

In return for the investment in Sirius, Liberty Media will own 12.5 million shares of preferred stock in Sirius XM (NASDAQ: SIRI) that Liberty can convert into common stock.

That would give Liberty a 40 percent ownership stake in the radio company.

Malone and Liberty Media CEO Greg Maffei are expected to join the Sirius XM board of directors.

"We are excited to be investing in Sirius XM. We have been impressed with the company, its operations and management team," said Greg Maffei, president and CEO of Liberty, in a written statement. "Sirius XM's ability to grow subscribers and revenue in a difficult financial and auto market is indicative of how listeners view this as a 'must have' service."

Mel Karmazin, CEO of Sirius XM, called the deal with Liberty remarkable given today’s capital market’s, and validation of what the company envisioned when it merged the nation’s two satellite radio companies last year.

“This agreement enables Sirius XM to continue to develop the opportunities first outlined in the merger of Sirius and XM,” Karmazin said. “By strengthening our capital structure and enhancing our financial flexibility, this investment allows us to continue providing the great content and innovative programming our subscribers know and love.”






Now did you see anywhere in there that they not only were giving up 40 % of the company but also paying 15% on top of that. I also read in another article that Malone had the loan out already and was paying the 15 % and found that this was a good place to invest it for the 15 % he was paying.

Intrinsic Value Investing: Recognizing Potentially Mispriced Stocks

Once again If I read it correctly Malone must feel he is going to make a hell of alot more on the 500 million then just 15% if he finds this to be a good investment while paying 15% interest on it.

Intrinsic Value Investing: Recognizing Potentially Mispriced Stocks

From what I have read SIRIXM is not paying any interest on the loan They are giving about 40 % of the company up. As I read it Malone had a 15% interest loan out and found this to be a good investment for it. Malone is paying the 15% and finds that buying 40% of SIRIXM to be worth the interest of 15% on it. SIRIXM will keep the dilution open until at least 2012 to convert the preferred stock to common option open.