Delisting Clarity On Sirius XM
With the stock price of Sirius XM Radio under $1.00, there has been a lot of discussion and questions about the stock being delisted from the NASDAQ. While this is a concern for shareholders, I have personally always maintained that the issue would be a long and drawn out process, and that there are many factors to consider. Included in these considerations are some actions that have been taken as a result of the current financial crisis we have all seen in the markets.
What does all this mean?
- With the three month moratorium now in place through January 19, 2009, companies currently in the 30 day delisting clock will be reset.
- Thus, assuming that SIRI still has a bid under $1.00 on January 20th, that day would be the first day of the 30 day initial delisting clock.
For more clarity, companies that have already received an initial delisting notice and are in their 180 day grace period, the 180 day period will be frozen but not reset. Thus, if they are on day 25 now, January 20th would represent their day 26. This does not apply to Sirius XM.
Some concern about the reverse split mentioned in the annual meeting proxy also likely centers around this delisting issue. The company has to try to put plans in place that will get the share price above the $1.00 threshold. A reverse split would help accomplish that.
Position – Long SIRI
Tyler, Did you confirm this by seeing a NASDAQ
news release ?? I couldn’t find one although
someone posted this info on Yahoo
Just because you have bring your toolbox to the job, doesn’t mean you use all the tools in it…
…but isn’t it nice to bring a toolbox full of tools?
I haven’t found a link to that Nasdaq info either. I tried for about an hour. Please verify that the Nasdaq info is true and post a link to where it can be verified…
This is what’s floating around on the internet chat rooms, but there are no links provided. I have tried to verify this with no success so far…
“Nasdaq implements 90-day suspension on min bid & min mkt cap
Effective immediately, NASDAQ has suspended the enforcement of the
rules requiring a minimum $1 closing bid price.
Effective immediately, NASDAQ has also suspended the enforcement of
the rules requiring a minimum market value of publicly held shares
(MVPHS).
NASDAQ will not take any action to delist any security for these
concerns during the suspension.
The suspension will remain in effect through Friday, January 16, 2009.
These rules will be reinstated on Monday, January 19, 2009.
—————————————————– —————————
Given the current extraordinary market conditions, NASDAQ has
determined to suspend the bid price and market value of publicly held
shares requirements through Friday, January 16, 2009. In that regard,
on October 16, 2008, NASDAQ filed an immediately effective rule change
with the Securities and Exchange Commission, such that companies will
not be cited for any new concerns related to bid price or market value
of publicly held shares deficiencies. These rules will be reinstated
on Monday, January 19, 2009.
As a result of the suspension, all companies presently in the
compliance process will remain at that same stage of the process.
However, if such a company is presently subject to being delisted for
concerns not related to the bid price or market value of publicly held
shares requirements, it will continue in that process with respect to
those other concerns. Over the next few days, NASDAQ staff will
contact each company affected by this suspension to discuss the
specific impact to the company. NASDAQ will continue to monitor
companies to determine if they regain compliance with these
requirements during the suspension.
NASDAQ believes that this temporary suspension will allow companies to
focus on running their businesses, rather than satisfying market-based
requirements that are largely beyond their control in the current
environment. Moreover, this temporary suspension should help to
restore investor confidence in affected NASDAQ companies as the
suspension will allow investors to make decisions without considering
the likelihood of a very near-term delisting. In the coming months,
NASDAQ will continue to monitor the affect that market conditions are
having on the operation of our rules”
This ruling only proves my point of voting NO to ANY reverse split.
This ruling buys Sirius ALOT of time and removes the delisting talk from the table for awhile.
180 days from January 20th is a few more quarters to prove our worth.
Of course the debt has to be refinanced by February….but putting that aside a reverse stock split NOW in light of this news is completely jumping the gun.
Did anyone see that horror movie “The Mist”….where the father kills everyone at the end including his son to save them from CERTAIN DEATH? Only to have the mist part and the army come in to save the day? He KILLED HIS OWN SON FOR NO REASON!
Lol…anyway…doing this insane reverse split when we have been given a HUGE extension on this whole delisting business makes NO SENSE.
And for Tyler to conclude his article reiterating his stance that a reverse split would be a GOOD THING blows my mind. I am sorry Tyler…I couldn’t disagree with you more.
In the spirit of a healthy debate, I think you are completely wrong.
I can not believe they are considering a reverse split! If they approve a reverse split we have been smoked! What a gimmick! First they have us wait for 17 months for the merger, then no spike, no 4.6 to 1 trade off for our XMshares, then we are told to wait till after Labor Day ….big things..bullshit! Finally, Mel pops his head out from his rock and says, the financing will not be a problem, bullshit….if its not a problem then get it done, before a reverse split. Anyone else fuming from this all the bullshit surrounding this company? 50-1 reverse split would be crushing. Guess what happens after your shares get squished, the stock free falls back under a dollar and we standing around with our d&%$S in our hands, like the losers we are!
Long SIRI, Long Pittsburgh, Long Willie Parker
They will probably reverse anyway before selling more stock to cover debt obligations.
It’s the Joe Paul Clayton method. Crank up he printing press.
friggin,
Thanks for spoiling the movie I had just rented from Blockbuster and was planning on watching today after the market closed to unwind and get my mind off of the market! I can’t believe you just spoiled the ending of the movie I was just about to watch right now while I ate my Subway sandwich. Please don’t spoil anymore movies for me, ok?
I still have not found a link to verify this Nasdaq stuff…
Frigginreagan,
I agree with you, this reverse split nonsense a sign of the end of times.
I still don’t understand why they would have to reverse split to sell shares.
Is it because no institution would want to or could buy shares at .25 & they have to get share price much higher before doing it ?
It’s a forgeone conclusion that sale of additional shares in big time on the table.
There will probably be no need for a reverse split. The fear of one will scare investors, keep the price down, and will make SIRI an even better buy.
Correct me if I’m wrong, but in the long run isn’t dilution better than paying outrageous interest?
Holy crap Demian! Lol. Did you really just rent that movie? I should have put a spoiler alert, but it came out so long ago, I didn’t even think. I’m sorry dude.
It’s still a cool movie tho. DOH! And hey! At least you’ve got a subway sandwhich. Mmmmmmmm suuuubwaaaay.
Anyway…Thanks Ben. I read your post and feel EXACTLY the same way.
It doesn’t take MUCH imagination to see this scenario play out should a 1 for 50 reverse split get approved.
For the life of me, I can’t see why Tyler not only CAN’T see that.
Only someone who ALREADY reduced his position and ISN’T still holding the majority of his shares that he bought years ago…would not be alarmed.
This is bad bad news for true longs.
And again, I will DEFINITELY be voting with a BIG FAT NO on that proxy. I urge all longs to do the same.
Fuck em. Why should we give up that power. Our shares?
Honestly. WHAT really would happen if they couldn’t do the reverse split? I dunno. But If good things happen to the company, I stand a MUCH better chance of recouping my losses with ALL my original shares rather than the miniscule amount I’d be left with should a 1 for 50 RS goes thru.
End of story.
In light of the Nasdaq moratorium on delisting, SIRI should delay the vote on the RS issue. They would have until almost the end of 2009 before they would have to do a reverse split. So I say vote no to the RS and let them put it up for a new vote after February at the earliest.
6 months for delisting. This RS talk better be a clause for refinancing.
You got it Spanyo. VOTE NO.
Voting yes makes NO sense whatsoever. Tyler’s stance on this makes me question his grasp on reality. Sorry T-man. I dig the hell out of you and your site and your radio show….but this idea that a RS is GOOD…or even necessary…especially in light of the delisting extension….makes absolutely NO sense. NONE.
What u smoking? Got anymore?
I kid. I kid.
But come on man. Please tell me your not sticking to your guns on this issue. Please. 🙂
I do not think SIRI will do a reverse split OR do a new offering. I think the announcements today are just contingency plans being set forth by SIRI in case they need it. Think about it for a minute. If they go to the bank and ask for loan, the bank will want to know of the plans to increase their shares above $1.00. Mel will turn around and say, these are our contingency plans. Also, the contingency plans are probably a way of tell the holders of the Feb. 09 converts that look..we have plans in place to take you out. We’re not going to do another convert deal (which the holders want)on unattractive terms with you. Let me know your thoughts.
Not to beat a dead horse….but the thing that upsets me the most…is that just yesterday I made peace with forgetting about Sirius and letting my shares ride. I finally let go of any hope of a short term pop and figured I’d check in on my 10,000 shares down the road. I felt comfortable that in a couple of years I’d finally get my chance to cash out.
But then this news came out and punched me in the gut.
With a 1 for 50 RS i’d have a measly 200 shares.
I would NOT feel GOOD about letting 200 shares ride for a couple of years. To break even the stock price would have to go way over $100!!!! If thats even possible for Sirius we are no longer talking 2 years….but 2 FRIGGIN DECADES.
And for years our anxiety would start all over again as the shorts would be given free range to bash it back down to under a buck all the way from $19.
Why would Mel agree to put his shareholders who ALREADY went thru that hell to experience it all over again??
A much more humane thing to do would be to take us to the back of the shed and shoot us point blank. Put us out of our misery. Declare BK before the RS Mel. Just END the pain.
Otherwise come out and GIVE US HOPE. Don’t say in passing to an interviewer that a RS is not what the company is interested in…..no…
COME OUT AND SAY IN A VIDEO…DIRECTLY TO YOUR SHAREHOLDERS THAT YOU WON’T DO A REVERSE SPLIT. LOOK US IN THE EYE.
The 10Q for 3rd Q will be an interesting read. I have a feeling this is not all about 2009 debt, but 2011 & beyond LTD as well.
If I remember correctly and not sure if I’m remembering Sirius only, but I recall 2010 being a reprieve from debt obligations and 2011 & beyond where it kicks in heavy again.
Mel wants a powerful company that is lean and not weighe down by debt, so if your $ is on the sidelines who cares if you get in after dilution, reverse splits.
But if your in all the way down to here it’s a disaster.
But he did say that they would price through converts, people that bet against him would get burnt and that a reverse split was not on the table.
Is it the credit markets & recession that he will use as an excuse to why he changed his mind.
Do you think he really believed he would have to take these measures when he bought 2 million more shares at 1.37 and was doing the dog & pony show ?
This is an impossible sell to investors, but how do you get a billion in financing when teh market cap of your stock is barely 1 billion.
He must be getting offers of 15% interest, which will eventually cripple co. He is going to be positive when he speaks of the ability to get a decent term loan or else we’d be at a nickel if he wasn’t.
You forget the simple fact that WE the shareholders have the power to DENY this attempt on a RS.
It’s real simple. Just VOTE NO.
If things are that dire short term and the long term prospects are so good…then if I were Mel, I would spend ALL my energy on trying to get either GOOG, MSFT or APPLE to buy us out.
Mel said that was his ultimate goal. The dude is 65. His contract is up soon.
His energies would be much better spent trying to woo a buyout than wasting it on a RS that the shareholders will just reject.
Can anyone confirm this Nasdaq delisting extention thing with a link?
To me, it is still rumor until I can confirm it with a link….
Demian –
I think that may have been bullshit. If you don’t hear it on CNBC in the next few hours, then someone made it up.
If they RS first, will the same 8B outstanding share limit still be imposed?
It’s one thing to double the current 3.5B shares, but a RS would drop the current share count by say 10x, leaving us w/ only 350M.
Then taking that amount to the slated 8B would get out of hand.
From what I understand is that if the stock goes 1 for 10, then the 8B figure would get adjusted as well…
Any thoughts?
I don’t think that Tyler would base this article on an internet rumor. I’m sure he verified the source of this info. I’m just trying to find where I can verify this and hope that Tyler posts a link to where this info can be found…
Demian, there is no Press Release — it is an SEC filing made by NASDAQ. They requested the extension to go into effect immediately, with the SEC waiving the 30-day waiting period.
Here’s a link to the forum section where I’ve provided more clarity on this:
https://siriusbuzz.com/forum/showthread.php?p=4132&posted=1#post4132
Thanks Homer!
Here is a link to the thread on the SIRIUSBUZZ Stock Talk forums where Homer has posted a link to the PDF….
https://siriusbuzz.com/forum/showthread.php?t=895
I feel silly for doubting Tyler’s article’s sourcing for even one second…
Thanks Tyler for reporting important info before anyone else!
I believe that after nov 10 th we will have some clarity in the direction of the co… if we will not be delisted till end of january and we dont vote till dec 18th I think it will be a non issue as we will be over a dollar by dec 18th..
SS Fan,
So you think on Nov 10th they will anounce financing?
That is what is currently holding the stock down.
I don’t believe the Q Numbers alone will move the stock much.
Jan 19th the 30 Day Delisting Period gets reset back to 30 new days for any company currently in the window. A notice would not come till late February. Then 180 more days to make an adjustment to the stock. A Reverse split is not really an issue here unless Mel wants a higher stock price so he has to sell less shares at market.
Friggin,
I understand your frustration at the prospect of a reverse split, however, I hope you are considering all the variables here.
The reverse split and the equity raising through share dilution are worst case scenarios. But, the board needs to have them as possible ammunition.
If you were on the operating table and had a horrible injury to your leg – you’d likely want the doctor to do everything they could to save the leg – BUT if it came down to your life… or your leg = which would you choose?
A reverse split is the same thing – it will only be considered if the LIFE of the company depends on it. I don’t think it will come to that.
I’ve said it before, and I’ll say it again…I TRULY believe if this company is headed for BK….it will happen REGARDLESS of a RS or NOT.
ALL a 1 for 50 RS will do is give the shorts more RED MEAT to feast on. They will chew it down to the bone until the share price goes back below a $1….and THEN after that LONG POINTLESS PAINFUL AGONIZING DESCENT….Sirius will declare BK.
WHY put the shareholders thru that??? Haven’t we been thru enough???
A RS will do SHIT. Plus they want to issue 4 BILLION MORE SHARES at the same time!!!
WTF???
The WHOLE POINT of a RS is to increase the share price and REDUCE the number of OUTSTANDING SHARES!
THE ISSUING OF BILLIONS OF MORE SHARES WILL OFFSET THE RS leaving us with the EXACT SAME AMOUNT OF DILUTION. EVEN WORSE ACTUALLY!
THIS would virtually ENSURE what I said the shorts will do. They’ll come in and KILL us longs.
I’m sorry. I don’t buy your analogy about cutting off the leg to save the patient. For one thing is the patient the company or the shareholders?
The COMPANY Sirius WILL survive.
I don’t know about shareholders, but I DO BELIEVE WITH EVERY FIBER OF MY BEING that if the 1 for 50 reverse split goes thru, I WILL have my shares decrease from 10,000 to 200 instantly.
And I AM CERTAIN the shorts will then ERASE the RS inflated stock price thus devaluing my measly 200 shares to practically WORTHLESS with no HOPE OF EVER getting back to break even.
THINK about it. Sirius would then have to go WAY over $100 for most of us longs to just BREAK EVEN.
NO FUCKING THANK YOU!
I’ll take my chances. I’ll KEEP MY LEG AND MY 10,000 shares THANK U VERY MUCH!!!
How many times have “doctors” been wrong anyway? LOL.
So spare me the medical analogy.
This is the longs LAST CHANCE to say ENOUGH! NO MORE.
TO MAKE A STAND and use our power to vote NO to this bullshit.
Winagain35,
I have to say I agree with friggin. I will even give you some facts to back him up:
As many as 75% of all stocks end up trading lower after a reverse split…enforcing friggin’s point that not only do we have fewer shares but the value is less, making the value of our investment virtually nothing.
One of the compelling reasons to do a reverse split is to get the share price above the magic $5/share as many fund managers shy away from stocks under $5.
A reverse split may sound good to some but it is usually a sign things are really bad and a last ditch effort to prevent being delisted.
Sirius needs to spend more time figuring out how to hit their debt obligations in February and shoring up the balance sheet, this is the only way to truly prevent the company from eventually being delisted.
giddy up