FCC Draft Order Circulated
Well, it is now official and in black and white. The FCC updated their “items In Circulation” list today and the proposed merger of Sirius and XM is on the list. The Draft Order circulation happened on June 17th.
At this point, the commissioners all consider the draft order and make their voting determinations. Watch for possible announcements about voting intentions over the coming two weeks, although commissioners do not always give an indication of their voting intentions.
With the Draft Order officially issued, an answer on the proposed merger is within reach.
Position – Long Sirius, Long XM
OUTSTANDING!
Weinke’s Opinion in Feb 07
“Based on our analysis and contacts, we continue to estimate a 30% chance of approval by the Federal Communication Commission and Department of Justice,” Weinkes wrote in a note to investors. “Outside a merger, we continue to believe that given the fundamentals and disparity of earnings value share in the industry, the risk to the downside for XM shares remains limited relative to Sirius.”
How do people still have so much faith in Weinke?
Looks to me like if they merge in the next few weeks all this craziness comes to an end. You will have a growing media company with 18 million subs, deals with all the car companies, and run by Mel Karmazin.
So true, Muscle13. What I love is that most people dont see what is going on, until it is past them. Along with the low stock price. They are going to wait till Mel says we are profitable. By that time it is to late. If you want to make the big money you have to be willing to take the risk of losing it.
After Googling Weinke, it is obvious that he has a long track record of negative comments against Sirius and XM. With many analysts setting a price target of $7 – $9 or even higher, how does this one guy have enough weight to knock down SIRI by 20% with one comment. I don’t get it…
Well let’s see… three weeks to vote, two weeks for the non-voted…. maybe six weeks for review… two months for an congressional inquiry… and five weeks for the Black Caucus or Jesse ” Georgetown Jackson ” to meet, demonstrate or hog any rolling camera. This will be follwed up by a final review before release. Yep…. Jan 2010 we should be ready.
Grandpa Lewis was right… Fuck You FCC!
When Mel can speak,(10 days or less) he will tell us about the 7 Billion in savings. Also the new company will be in the BullsEye of companies like MSFT, Google, Clear Channel, Disney, CBS, NBC, Fox, and others. The reason
for their interest are Backseat TV, Ads,300 million cars on the road going to work everyday who dispite all the Ipod, HD, B/S listen to the radio (SADRAD SOON IN ALL) These companies want this new way to reach the driving public. Mel said $25 a share I think possible in 2 years.
Pete, I think all that other crap has little meaning once the vote comes down on a license transfer. The two can then merge. They could very well merge now, if they wanted too and did not care about the FCC punishment for doing so. The DOJ has already given them their blessing. Lets remember technically the FCC is only dealing with a license transfer not weather they can merge or not.
>>>They could very well merge now, if they wanted too and did not care about the FCC punishment for doing so.
John, you need to be careful with this thinking… sure they could go ahead and just “merge”, but the XM license cannot transfer to Sirius – with the way the rules are written. So they would have to give up the XM license to the FCC. And without that license, they cannot use the XM spectrum.
Punishment? There would be no punishment. The FCC would file an injunction in Federal Court, that would stay the merger (or prevent the license to transfer) — preventing it from closing. Then the FCC would present a case in Court as to why the stay should be permanent, due to FCC laws/policies.
If you look at what the FCC distributed to the commissioners, it says this:
“XM Satellite Radio Holdings, Inc. to Sirius Satellite Radio, Inc. MO&O/R&O.”
The R&O stands for “Report & Order” — this is the determination of the Commissioners as to whether or not the merger should be allowed to proceed, and in the public interest.
The MO&O stands for “Memorandum Opinion & Order”. These are issued when changes to rules and policies have been requested. Both Sirius and XM filed to have the rules in their original licensing changed, waived or determined to not be applicable… it was listed as a seperate Docket than the 07-57 — which is the one dealing strictly with the public interest behind the merger. The FCC issues MO&O’s stating how and why rules should be changed — or why they shouldn’t be, if they determine to not change them.
So Martin issued draft orders on two dockets to be voted on. They will likely be announced together — and released as one formal announcement.
Regardless, they can’t just go ahead and do it — because the FCC will file suit in Court, preventing them from actually closing. They have no choice but to wait it out.
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>>>Lets remember technically the FCC is only dealing with a license transfer not weather they can merge or not.
John, I just read this line here too — this unfortunately is not true. Whenever a licenesee files for a license transfer (no matter who and what kind of FCC license), they must file a public interest statement, stating why the transfer is in the public interest. If the FCC decides that the transfer is not in the public interest, they can deny the transfer. So in a sense, the FCC does have the power to prevent a license transfer, because of a merger. Denying would be the way to prevent the merger, if it’s not in the public interest.
Again, while technically there is only one Docket that the Commissioners are looking at — 07-57 — there are two votes going on here… MB 07-57 & FCC 07-119
This NPRM… FCC 07-117: http://fjallfoss.fcc.gov/prod/.....6519559783
Will be voted on by the commissioners… plus the overall docket dealing with the public interest, being MB 07-57.
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Speaking of “Public Interest” … I’m a little surprised that people don’t ask or don’t know what governs the FCC’s decision… after all, it’s not like Johnny Adlestein says …. ah, screw em… or “Get off MY Lawn” Copps says….. Not in a million years sucker… I hate Howard’s hair doo!
Take the time to research the ” Public Interest Standards” which should be their decision making bible.
Homer, I agree with what you are saying, and realize that, but you did not understand what I was saying in response to Pete. Which was that it will not take that long for simple reasoning, that once they get the vote that is in favor, by the FCC, why would that body now file suit to block it. Simply put it will not take that long.
What about the other 99 items on the circulation list? Some are older than a year. Does that mean they have not been voted on a year later? So who is to say we can expect a vote in the coming weeks?
Can we ever expect to make money on this?
What I want to know is who is selling right now? Makes no sense…
IMHO, it’s not a matter “who’s selling” — but that no one is interested in buying. It’s the law of supply and demand — when buyers dry up, while having plenty of sellers… the price is going to drop. No one is interested in buying the shares being put out on the market.
These companies have a lot to prove now — the worst case scenario is being baked in to their prices.
I would not be surprised, with a positive closing of the merger — including limited changes to the known concessions — and a positive announcement of the refinancing of XM’s puttable debt… Sirius will see a 20%~25% jump in PPS relatively quickly… perhaps in as much as one day. And possibly a follow up run after that.
Positive news like that may bring the buyers back — along with shorts covering Sirius. If the buyers come back…
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And I don’t mean to come off sounding like a Sirius pumper… I am not. But it’s like a pendulum… when it swings too far to one side, it’s going to swing back. The question is, how far is this sucker going to swing in that direction — I’m no good at making those kinda calls, so I won’t. But when it does swing back… I think it’s going to happen fast.
I agree with you. I’m just annoyed. I just don’t understand how it drops 20% the other day. That means that all of us are in the red even after that 25% pop. Whoopee.
Also, I no longer think it’s going to happen fast and I also think that there’s a good chance it drops following the merger approval.
When Homer becomes a Sirius pumper, I’ll go gay.
Neither will happen in 10 lifetimes.
Hey Homer…. I swung 100% into XMSR. I swear to God. Their OEM’s (in the face of Ford and DCX crashing) and the spread convinced me.
Not trying to be paranoid, but if both stocks tank just before merger approval, what if any benefits are there to Sirius? for these stocks to go down so fast and so far just before the long awaited approval and with no bad news just stretches my brain.