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  • Liberty Media Appeals FCC Decision Regarding Sirius XM - What It All Means [View article]
    >>>Ok RMT, who keeps control if the Liberty shareholders get the shares and either keep or sale. Because now they are no longer owned by one entity?


    That's just it and the whole idea of why it will be better for shareholders in the long run... Sirius/XM becomes an autonomous company again. The Board of the "new" company will be set up by Liberty, prior to the split-off -- likely with "their" people, but that Board will run the company... just like it does now. It will give a clearer picture of the ownership/management structure of the company -- without a "large" owner standing over it.

    Keep in mind that Malone is a large shareholder in Liberty - so he too will have shares in the new company personally... and will likely be one of the larger shareholders when all is said and done.


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    Jun 2 11:04 AM | 1 Like Like |Link to Comment
  • Liberty Media Appeals FCC Decision Regarding Sirius XM - What It All Means [View article]
    >>>There are really two options.....control the board the easy way by election, or by force with 50%.


    Who know's? The way I see it - is a cat and mouse game now...

    Liberty converts half, then calls for a proxy vote. They will start with 3 preferred directors (1 of which will have to be "independent of Liberty")... then will go from there.

    I then see Sirius upping the board to 15 seats again, which they can do - according to the By-Laws... it's how many they had last year (recall the GM & Honda guys that were never replaced... the Board just went down to 13 seats). So Sirius up it to 15...

    Liberty, now needing 8 seats - will nominate 5 to the Board to go along with their 3 preferred seats. They then call a proxy vote and vote their 1.6 billion shares in favor of those 5, while abstaining the Sirius nominations (which is the same as a no vote).

    Sirius will then nominate 8 of their own... likely the current 8 they already have... and will have to hope that more than 1.6 billion shares will be voted in their favor, of the (roughly) remaining 3.5 billion voting shares.

    Problem is... there will be 12 seats up for grabs -- and 13 nominated. 1 will be the odd man out... either a Liberty nominee or a Sirius nominee. If Liberty has any other institutions with shares in their corner, then Sirius is SOL. Or if many don't vote, that will also kill their chances.

    So I see Liberty gaining control, in this fashion... but it still won't be enough. That is because Liberty needs to have more than 50% ownership in order to do the RMT. Recall that Liberty shareholders must have a majority of the "new company" in a split-off. So Liberty will still need 50.1% of the company.

    At least with de facto control and Board control, they can have control of these during the license transfer process - which is quite complicated, as you know. That's really what this is likely about... make sure the FCC is on board, before spending money/resources to take over the company with a majority.

    Well, that's my thoughts anyhow...


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    Jun 1 02:34 PM | 4 Likes Like |Link to Comment
  • Liberty Media Appeals FCC Decision Regarding Sirius XM - What It All Means [View article]
    >>>In doing this Liberty would control 5 Preferred Board Seats and two Common Board Seats out of a total of 13 seats. Simply stated, Liberty would have 7 out of the 13 Board seats and thus a majority of the Board.


    Spencer... keep in mind that by calling for a proxy vote to get the new "nominees" installed - they're basically calling for a re-election of the Board itself. In doing so, Liberty gives up some of what they already have.

    How's that? Recall in the Certificate of Designations for the Preferred Shares, that the Board representation that they get is based on the number of preferred shares held. In fact, if Liberty converts approximately half of their 12.5 million preferred shares - they'll be left with around 6.25 million (give or take however many). In the certificate of designations it clearly states that the holder of 5-7 million of the preferred share will be entitled to only 3 Board seats.

    So if they convert portions of the preferred shares, then call for a proxy vote for a "new board"... they'll be starting with only 3 preferred director seats -- then be adding from there. They don't get to keep the seats they already have, plus add more via their common nomination/vote... a proxy vote for board seats is a brand new vote with the top XX vote getters, getting on the board.


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    Jun 1 01:50 PM | 3 Likes Like |Link to Comment
  • Sirius: Karmazin Killing This Stock [View article]
    >>>That's been your shtick for years - patrolling bearish article after article and trying to discredit anonymous authors.


    So you're anonymous? There's credibility!

    Please Cameron... sit down and take the deserved constructive criticism I've been giving you like a man. This outright hostility of you toward me is petty and wreaks of desperation to try and cut me down... all because I blasted you.

    Really. If you refuse to recognize your flip flopping, then there's nothing more I can do for you. As for me and my "patrolling", I've got to get back in my sqad car to get back on my beat. <lame>


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    May 29 08:26 AM | 4 Likes Like |Link to Comment
  • Sirius: Karmazin Killing This Stock [View article]
    Wow Cameron, is that all you got? You've resorted to putting down and trying to discredit an anonymous message board poster?

    Talk about falling from heights...


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    May 29 12:29 AM | 2 Likes Like |Link to Comment
  • Sirius: Karmazin Killing This Stock [View article]
    >>>It is one thing to have the opinion that you dislike a particular corporate CEO, but it is disingenuous to attempt to support that opinion with "facts" that bear very little resemblence to the truth.<<<


    What the author doesn't realize -- it is so easy to take somebody's quotes out of context and draw an opinion about the person that could go many different ways.

    Taking quotes out of context and trying to present a negative opinion about the person and their ability is as bush-league as it gets for writers. It's speaks volumes to me about their integrity, their credibility and their due diligence.

    This will likely be the last time I read anything from this author... as his "opinions" are of no use for me; nor are they credible or reliable.


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    May 27 01:05 PM | 5 Likes Like |Link to Comment
  • Liberty Media Could Be A Sirius Problem [View article]
    >>>'it appears liberty has controlling interest in SIRI and will make a tender offer of 10 cents for the remaining shares and since they have the votes the retail investors will be forced to sell!'<<<


    Too funny... and likely will happen. Some clueless sap who doesn't understand the stock market will suggest this -- you are correct.


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    May 21 05:11 PM | Likes Like |Link to Comment
  • Liberty Media Could Be A Sirius Problem [View article]
    >>>do you think his sales really have that much of an impact<<<


    Headline risk, more than anything... from writers who don't understand that a 10b5-1 Trading Plan is a contract to sell, regardless of the price and timing. Karmazin put the plan into motion in early February before much of this started -- he can't go back on the contract now that things aren't looking so peachy. So that's what I see it mostly as -- writers proclaiming Karmazin is selling while the company is under attack... these writers just don't understand the "why" behind it and that its out of his control.

    From a numbers standpoint, the overall increase (based on outstanding as of 3/31/2012)... it increases the common by 1.5%. However... when factoring in the shares from the convertible bonds, as well as Liberty's preferred ownership, the dilution is 0.8%.

    So not very impactful. It's all a headline risk.


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    May 20 12:35 PM | 4 Likes Like |Link to Comment
  • Liberty Media Could Be A Sirius Problem [View article]
    >>>Why pay for it hundreds of millions of dollars , albeing as low a price as possible, if they want to degrade it?


    Many of the writers seem to be focused toward the trader -- not the investor. For those of who are long, sit back with popcorn and watch it all unfold. The real price increase - will not happen until after the RMT and the Street sees how Liberty is going to structure it.

    Liberty is doing what is in its best interest for its shareholders - I can't fault thme for that. I may not like it as a Sirius shareholder, but there is little/nothing we can do about it. Other than waiting for it to all be done and seeing how Liberty is going to sort it out... likely via the RMT.


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    May 20 11:47 AM | 5 Likes Like |Link to Comment
  • Liberty Media Could Be A Sirius Problem [View article]
    >>>If Karmazin were truly committed to maintain control of the company, he would not be putting his shares out there to be bought. Is this a sign that the CEO is ready to give in?<<<


    A little due diligence goes a long way... here is some DD for you that will answer your questions raised in your article -- taken from my comments to another similiar article where the author didn't do the research...

    ~~~~~~~~~~~~~~~~~

    Karmazin received 3 million restricted shares when he signed with Sirius in 2004. Those have since vested. Karmazin also went on to purchase an additional 5.5 million shares on the open market over the next few years (at price averaging $4+). Karmazin still holds all 8.5 million of these shares and has given no indication of selling them.

    Karmazin also received 30 million stock options at the time of the signing in 2004 at much higher prices ($4.72/share). Those stock options were forfeited in 2009 when Karmazin signed on for 3.5 more years. In return, he received 120 million stock options at $0.43/share. These vest in 4 equal blocks on December 31, 2010, December 31, 2011, June 30, 2012 and December 31, 2012. These options expire on December 31, 2014 (a relatively short period).

    On February 17 this year, Karmazin announced that he would be exercising and selling half of these options, starting in April, to fund his philanthropic efforts... not for personal financial gain. The first block of which sold in mid April... and 30 days later, the second block sold. So far, approximately 25.1 million options have been sold – of the 60 million already announced to be sold. Based on the pattern so far, it appears that another 12 million will be sold in mid June, another 12 million in mid July and the final amount in mid August. This is not unexpected selling, as you are suggesting.

    The fact is simple – Karmazin had 60 million stock options vested to date and has sold 25.1 million so far, under the 10b5-1 Trading plan to fund his philanthropic efforts. He has 35 million more that are vested, as of today… Yes, an additional 30 million will vest at the end of June and the final 30 million will vest at the end of December. Karmazin has already stated that he’s only selling the first 60 million… likely from April through August, under the 10b5-1 trading plan, to fund his philanthropic efforts as I mentioned. I also note that Karmazin can't control the pricing or the timing of the sales once the trading plan is set into motion.

    After August, Karmazin will have 60 million options still (half of which will be vested); then he will also have 5.5 million shares bought on the market and 3.0 million restricted shares... totalling 68.5 million shares still owned.

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    May 20 11:44 AM | 5 Likes Like |Link to Comment
  • Sirius XM: This Really Is A Major Tree Shake [View article]
    >>>So in my mind we can not rule the 80% out. I read somewhere that they want to take it to 80% with Sirius money and then take it private.


    These two sentences is where we will have to disagree -- and strongly. That is so against traditional Liberty ways. Not only that, but I have to point out that for Liberty to use "Sirius' money" to reach 80% - they'd have to buyback 2.9 billion shares... which would likely be well over $6 billion. That's not going to happen any time soon.

    Even a combination of Sirius buybacks (the most they could afford over the 18 months would be approximately $1 billion of Sirius cash)... which would still require Liberty to spend $4 billion of its own cash to buy enough shares to reach 80%.

    I'm sorry but the possible benefits of the NOL's based on a "potentially" higher share price does not justify spending $5 or even $4 billion to reach 80%. Spending billions to lose money or breakeven on the NOL's/80% investment? When the only way to actually make money on it is on the "potential" that the stock price will be higher down the line? That's a risk that I highly doubt Liberty would be willing to take. Again, that's not their game.


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    May 17 06:22 PM | Likes Like |Link to Comment
  • Sirius XM: This Really Is A Major Tree Shake [View article]
    >>>I agree that to keep it separate would be cheaper for Liberty --- in that it may not be worth buying 80% to get the NOLS which may only be worth 3 billion in net tax savings.


    My point has been that there is no reason for Liberty to go this far, that it is against past Liberty practices and that - as long as Sirius is profitable - Sirius will be able to use more of the NOL's than Liberty, therefore if they just take majority ownership Liberty will be able to indirectly benefit by the use by Sirius, through its earnings consolidated into Liberty.

    A profitable company consolidated into Liberty is a good thing for their earnings... but a company enjoying even more profits because of NOL writeoffs, make it even better for Liberty.

    Why spend $5 billion to take an 80% stake in a company, just to enjoy less than $5 billion in tax writeoffs -- that doesn't make fiscal sense. If I were a Liberty shareholder, I'd be a little ticked by that.


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    May 17 07:59 AM | Likes Like |Link to Comment
  • Sirius XM: This Really Is A Major Tree Shake [View article]
    >>>The IRS code section in reference is 382. The rule is in place to prevent profitable companies from buying loser (NOL) companies with the sole purpose of reducing taxes payable/tax expense. Liberty will NOT be able to recognize all the NOL acquired from SIRI.<<<


    The poster is misinterpreting the situation, as are you. The above is absolutely correct. It is to prevent the above scenario for LOSER companies from being bought out to use their NOL's... meaning, companies that continue with LOSSES being stripped of their NOL's for a parent company. Instead once consolidated, the parent company needs to do a complex calculation to figure out what they can use from the subsidiary, if anything.

    The Sirius situation I'm noting is a different situation altogether... whereby SIRIUS uses the losses to cover its OWN taxes (not Liberty's taxes). This would increase Sirius' earnings by offsetting its taxes. Then with Liberty's direct ownership of Sirius and its earnings consolidated into Liberty -- it benefits indirectly. Get it? The better Sirius does, the better Liberty does. Now reaching 80% WOULD allow Liberty to consolidate for tax purposes and allow Liberty to take the NOL's to offset its own taxes - seperate from Sirius... but that is not necessary since Sirius is a profitable company now and can use the NOL's themselves.

    Again, the above situation quoted by you is a different situation and meant to prevent parent companies from using its subsidiaries NOL's. In the case I'm refering to, Liberty does NOT use the NOL's, Sirius does. But Liberty still benefits, regardless of Section 382 - because Liberty will consolidate the Sirius earnings into Liberty's.

    This is a situation I've been pointing out for 2 years, that few seem to be able to comprehend.


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    May 16 10:21 PM | Likes Like |Link to Comment
  • Sirius XM: This Really Is A Major Tree Shake [View article]
    >>>Liberty can not enjoy the tax advantages of the NOLS unless they own 80%.

    This is not true. If/when Liberty takes majority control of Sirius - they will consolidate their earnings into Liberty's. Therefore any benefit that Sirius see via their own use of the NOL's to offset taxes -- will indirectly benefit Liberty's earnings. You understand that any increase in Sirius earnings benefits Liberty, no? Therefore, Liberty does not need 80%.


    >>>What do you mean about a new short position - are you talking about the forward agreement? How do you know that they are shorted shares?

    You really think that Liberty would guarantee what some call a lofty price of $2.15 for 302 million shares without creating some sort of hedge first -- in case something crashed between the time of the FSA signing and the closing of it?


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    May 16 02:01 PM | Likes Like |Link to Comment
  • Sirius XM: This Really Is A Major Tree Shake [View article]
    It is highly doubtful that they will take the ownership up to 80%. To do so would require Liberty buying up and over 2.3 billion shares -- a price likely to exceed $5 billion in value. Even using their own money to buy, with using Sirius money to do buybacks -- this goes against Liberty's prior ways. In fact, they don't own that much of money of their subsidiaries.

    More likely, look for majority ownership - followed by a split-off into a new company with other assets (live nation); and for them to ask Sirius holders to merge in to the new company. At that time, the reissue new stock for the new company - at a more sensible sharecount.

    This is far cheaper and accomplishes the same goal. At majority ownership, Liberty still gets to enjoy the benefits of the NOL's that Sirius has, without tax issues and the costly move of trying to strip them out of Sirius.

    I am not with you on this.

    And BTW, as noted by others -- the shares returned in the 7% Convertible Notes were related to the share borrowing facility that was initiated back in 2008. These shares were returned to Sirius and retired. They were not put back in to the float; they were not reshorted; they were not exchanged. They were retired. The subsequent drop was either coincedental or companies reestablishing new short positions with shares that were then available on the market. In fact, this is likely the case because we now know that an investor(s) have established a new short position of 302 million shares - which Liberty is holding the bag for them (the FSA).


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    May 16 08:20 AM | Likes Like |Link to Comment
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