homer985

Wall Street Takes a 'Wait and See' Attitude Towards Sirius XM

With all the back and forth in the comments section, I can't figure out who said what... what I do know is this. As of June 30, 2009, Sirius and XM had the following coming due this year:

-- 8 3/4% Convertible Subordinated Notes due December 2009, $1.75MM
-- 10% Senior Secured Discount Convertible Notes due December 2009, $33.25MM
-- 10% Convertible Senior Notes due December 2009, $227.5MM

Then in July, XM used a portion of its June debt offering to repurchase $179.1MM of the 10% Convertible Senior Notes. This left $48.4MM remaining outstanding on these notes.

IMHO...

-- The $1.75MM in Sirius 8.75% Notes will be repurchased with cash on hand;
-- The $48.4MM in XM 10% Notes will also be repurchased with cash on hand, or possible an exchange offer with the holders for shares;
-- $33.25MM in XM 10% Notes are held by Honda. Honda will work out some deal to exchange these for shares, IMHO.

The amount of cash needed to fund these maturities will be around $50MM, IMHO. Keep in mind though, that while Sirius and XM had a combined $541MM in cash on hand -- $179MM of that was used to repurchase those XM Notes, reducing the cash to $362MM.


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Sirius Radio: Glowing or About to Burn Up?

It is "one" day, while they are in the 30-business day cycle -- because they are not "non-compliant" yet. This is where they are now.

If they become non-compliant (after September 11, assuming still under $1), they are given the 180-days to become compliant again and sent the notification. To become compliant, they must then have the closing bid above $1 for 10 consecutive sessions.


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On Aug 25 09:33 PM SIRI-Doom wrote:

> The rule was 10 days trading over a buck to reset the clock. Homers
> post indicates one day close. I hope he is correct. It would give
> a few days...

Sirius Radio: Glowing or About to Burn Up?

The post below is incorrect information... that is in regards to market value... Sirius is currently under the minimum bid price of $1. That rule was suspended for the better part of the last year, but was reinstated on August 1st. After 30-business days, companies with bids under $1 will receive non-compliant letters in the mail. The date of this right now for Sirius is September 12th.

Here is the details I explained last night on Yahoo:
messages.finance.yahoo...

The timeline is here:
messages.finance.yahoo...


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On Aug 25 05:00 PM RealityofSiri wrote:

> I posted this on another article but apparently Siri Doom thought
> he could push his lie on a different article:
> In regards to delisting NASDAQ has decided to relax some of the deadlines
> ailing companies must meet to avoid delisting. Previously, if the
> company doesn't reach market value of the listed securities for 10
> consecutive business days, it is allowed 90 calendar days to regain
> compliance. NASDAQ plans on bringing the initial non-compliance period
> to 30 days. The company would then have 180 calendar days (as opposed
> to 90 calendar days) to regain compliance. If the company is still
> unable to regain compliance, it can appeal to a hearings panel, and
> if granted stay, the maximum extension is 360 days form the date
> of the staff delisting determination. – Source: Compliance Reporter
>

Sirius Radio: Glowing or About to Burn Up?

Two problems I see with your article... first, you said:

"Outstanding liabilities are $7.3 billion; and total debt currently runs $6.73 billion—the majority of which is at rates of more than 10%."

This is a bit misleading... yes those are the liability and debt figures, however the overall numbers are skewed, due to the large amounts of defered revenue, defered credit and defered tax -- which is carried as a liability until recognized in earnings. In fact, $3.3BB of the $7.3BB in liabilities are defered, until recognized. Very clearly... this is not debt.

Furthermore, of Sirius XM's $3.3BB in debt -- only $1.3BB of which is at rates above 10%; another $250MM is at 10%; the remaining $1.8BB is at rates below 10%... so in fact, the majority of the debt is BELOW 10%.

You may want to update your records.

The other statement you made that jumped out at me was this one:

"the constant threat of Liberty Media’s conversion of their 12,5 million Class B shares—an option come Feb 2012—looms on the horizon, and would amount to a 40% total ownership of SIRI."

This is an error because Liberty can convert their Series B Shares (not Class B) at any time they chose. The issue is regarding going over 49.9% ownership, which they can do after February 2011 -- under very specific conditions. The February 2012 date seems to be a common misunderstanding of the agreement. Liberty can get permission to take a majority stakes -- or they can make a tender offer for the remaining stake without permission. Regardless, they can convert they're Series B shares any time they want -- however, once they do, they give up their seats on the Board of Directors as well as the anti-dilution measures that are in place to keep them at 40%.



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Open Letter to Sirius XM Radio

relmor said: " Mel blamed the market and because the NAB would file an appeal. NAB had plenty of time to file an appeal, trust me."



FWIW, this is not true. Karmazin stated that the NAB was shopping for a friendly Judge. Here's what this means...

If Sirius and XM took their time to close the merger -- then the NAB could have filed a quick appeal with the FCC or the Court of Appeals and at the same time, found a "friendly" Judge to issue a temporary injunction -- which would have prevented Sirius/XM from closing the merger until the Court of Appeals reached a decision on the NAB's appeal.

I speculated that this could happen quite a bit (before the FCC announced their decision and after). The NAB's goal was to slow down the merger as the process was killing these companies. But the NAB could not file an appeal until the FCC announced their decision. And if they hadn't closed the merger yet -- they could get a Judge to issue an injunction preventing it... and they'd still be sitting there today... waiting. While they'll likely win the appeal regardless, the continued waiting would continue to harm the companies.

They had no choice. Take the financing that was in front of them and close the merger as fast as possible... or still be sitting there today. And from what I hear from one of my contacts -- a portion of the XM financing had an 8/31/08 expiration date on it... had they not taken it and closed before that date, it was gone.

So I do not agree with your statement that the NAB had plenty of time; and do know that Sirius had no choice but to take the financing and close quickly.


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Sirius XM Shorts Scrambling to Cover

Cos1000 - Remember, the first set of shares borrowed (approximately 183 million) were already sold short... they were placed via the offering by Sirius, who placed them for $1.50 per share -- for the borrowers. Those shares were sold... so they are now short. That damage is done. If they short the remaining shares, via the "supplemental shares" UBS/Morgan Stanley may go long an equal number at the same time, however it is at "their" discretion. So the damage may be offset some... that could be what we're seeing now -- a bit of sideways action.


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Sirius XM Shorts Scrambling to Cover

Tavares... I start work at 4:30 in the morning (while you're sleeping like a baby)... and continue to go through emails and edit music logs while at home all day long -- well into the evening hours.

Professional? Yeah, my work gives me a lot of leeway because I put in more than my fair share of hours at the office, as well as time at home. Just because you don't like it, doesn't make it wrong... if I'm still at the office after 1PM, I'm on my time -- and my work knows it.


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Sirius XM Shorts Scrambling to Cover

And yes, the previous post was me. I'm at my work computer now and didn't realize it was logged in to my old old Yahoo username -- from before time.

Sirius XM Shorts Scrambling to Cover

Cos... the mid July short interest was 159 million. It ballooned up with the end of July figure to 310 million... an increase of 150 million. The loaned shares to the hedge funds was 183 million and they were traded on 7/28/08, at a price of $1.50. That puts them just in time to be included into the end of July short interest report, taking it up to 310 million.

Then when the Arb players began closing their positions on 7/29 and later, this was reflected in the mid August report. This is because any and all short trades made from 7/29 through 8/12 would impact that report. Thus, it dropped by 101 million. These being the Arb players that went long XM over the last year or so, while shorting Sirius.

I don't believe that the hedged positions have closed out yet -- they wont close out until the debt is converted, many years down the line.

Right now, the 210 million short interest is made up mostly of the hedged shares sold at $1.50 (between 150~180 million). There is then another 30-60 million "other" shorts still in the mix. I suspect the end of August short interest will continue to show a drop.


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Sirius XM Shorts Scrambling to Cover

The shorts doing the covering are the Arbitrage players, that is how there was a 100 million share drop in the short interest while the stock showed no signs of being runnup by convering. That is because the Arb shorts didn't have to buy on the open market to close their shorts.

The numbers add up... the increase at the end of July was the new shares being loaned out for shorting by the hedge funds, then the decrease after July are the Arb players exiting their positions.


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