Would it not be possible to vote for the extra shares and the RS, if there was a poison pill added to the vote to stop a take over of the company? I believe this would stop any concerns and would allow the vote to pass.
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Would it not be possible to vote for the extra shares and the RS, if there was a poison pill added to the vote to stop a take over of the company? I believe this would stop any concerns and would allow the vote to pass.
Shouldn't this be in the Stock Talk forum?
Ouch! G-String Wedgie!! Pull it out!
Demian -
Just curious, do you work for Sirius Buzz ?
Can someone explain how the poison pill works. How do you just put something in place and wala, you can't be taken over in a hostile fashion ?
Demian, sorry did not think it mattered this is General Sirius Disscussion. This really has little to do with just the shareholders but the protection of everyone that has anything to do with SIRIXM. To include the people that work there, and the current subscribers.
sxminvestor, It basically makes it to expensive/impossible for another company to come in and take over.
P.S. I see it has been moved anyway, so the placement of it is moot now.
John -
Thanks, but I still don't undersatnd how you can make something more expensive. The company is worth what is is worth at the market cap or enterprise value, no /
If you could expand upon it, I'd appreciate or else don't worry (I'll search google for explanation)
Found this explanation on Google:
Poison Pill
A strategy used by corporations to discourage a hostile takeover by another company. The target company attempts to make its stock less attractive to the acquirer. There are two types of poison pills:
1. A "flip-in" allows existing shareholders (except the acquirer) to buy more shares at a discount.
2. The "flip-over" allows stockholders to buy the acquirer's shares at a discounted price after the merger.
1. By purchasing more shares cheaply (flip-in), investors get instant profits and, more importantly, they dilute the shares held by the competitors. As a result, the competitor's takeover attempt is made more difficult and expensive.
2. An example of a flip-over is when shareholders have the right to purchase stock of the acquirer on a 2-for-1 basis in any subsequent merger.
This is similar to the macaroni defense, except it uses equity rather than bonds.
sxminvestor, That is correct, but not the only thing that can be added. There are many other things that can be added (they can add to the corp. by laws), that are in a sense considered poison pills. That is the part that makes it impossible for a take over.
Wouldn't even the talk of a potential takeover boost the share price? The shareholders would have to approve it and it would have to be at a huge premium....would it not?
I guess a hostile takeover would be a whole other story though...
Demian, that is correct it would kill any take over hopes. That is not a problem though because most intelligent people know that this companys spectrum alone is worth 6 or 7 billion (many have no idea just how much spectrum it is and how it will make SIRIXM a media giant the likes of which not seen in a long time). Many of those are in it because of the long term fortune that can be made off it. I for one did not get in it a second time starting back about 3 years ago to make a short term quick buck. The poison pill can also be taken off at a time the company is worth the appropriate PPS or be given a time frame that it would expire. Also it would not need a hostile take over there are plenty of shareholders that have gotten in on the cheap (.4 to .9) and would vote for a buyout of 2 dollars. Now if you think 2 dollars is a huge premium then you confirm what I just said about, people that have gotten in on the cheap, and if you dont then you should be as worried as I am.
Look at Yahoo. When Microsoft was looking at buying Yahoo, they put in a "poison pill" that basically stated that if Microsoft bought them out and the employee didn't "feel comfortable" there anymore, they could leave and microsoft would have to pay them something like 3 years salary and keep their benefits in tact for a year. The employee needed no other excuse other than they didnt want to work there anymore. That "poison pill" was going to cost Microsoft an additonal 8 billion dollars or something to that affect, basically causing the deal to fall through.
john, I am right there with you. I have not started to average down since the merger. I am not completely comfortable doing so at this moment and finances are a bit tight as it is. If someone came in and bought out the company at $2, I would be in a world of hurt. But there are many that are accumulating a ton of shares right now that would be making a killing with a $2 buyout. That scares the crap out of me....
I also agree that putting in a poison pill is a good idea to keep us from getting sold out. It also keeps management honest as John said, if they wouldn't go for this then their motives need to be seriously questioned and we all have been misled.
Newman, you are correct my partner and I put into our corporate by laws that every vote needed 70 % approval to pass and we each held 50%. There were many other things we added.
cos1000, There are other reasons that the board may not like this and may not want it. But considering the atmosphere of distrust going on, the good I think, out ways the bad. Plus it would be the easy answer to Micheals H. problems. Just make it part of a vote on the RS and the adding 3.5 billion share delution.