The merger finance deal........
"This is an offering of an aggregate of 262,399,983 shares of common stock of Sirius Satellite Radio Inc., of which 183,679,988 shares are being offered on a fixed price basis."
"Fixed Price to Public $ 1.50 $ 275,519,982"
"183,679,988 of the borrowed shares will be initially offered at $1.50 per share, and the remaining borrowed shares will subsequently be sold at prevailing market prices at the time of sale or at negotiated prices."
Thanks Win. You are correct. (Forgot to carry the 1...ha ha) So dilution is not such a big deal.
More like 2%.
You would think that it would be priced in with the shares down around 90% from it's 52 week high...
Originally Posted by spanyo
Yeah, 2% right now is about a penny. So give a penny take a penny.
Now how will they come up with the 270M ?
Selling shares or trading the shares for the debt like they just did for the 30M - alot more dilution coming for the Feb converts I guess.
Then maybe a 3 year term loan for the May 400M & then just the Dec 400M XM converts.
- The holder wants to short Sirius. Really? I find this hard to believe -- because what's the potential gain? Shorting at $0.38 all the way to zero? The upside risk here, by far outweighs the downside potential.
- Convert and dump... I don't know that it could be a holder looking to convert then just dump their shares either, why? Because the holder of these Notes held $30.5 million of Sirius debt for the last 5 years. Why would they be willing to convert that debt into 67,038,070 shares of common stock at $0.455/share -- then just dump it at prices less than that? For example, with todays close at $0.386... that puts the value of the newly converted shares down 16% already - down to $25.8 million. That's a big hit to take, when the Note holder had the right to hold until maturity and to force Sirius to buy the Notes back at maturity with cash.
- Could the holder wanted to go long at these levels so they took an offer from Sirius? I suppose it could be possible -- however, that's a lot of risk to be taking in a tough economy with no guarantees of refinancing the remaining 2009 debt.
- So that leaves the other possibility that has been brought up -- that the holder was already short a number of Sirius shares from (???) and they're using some or all of these shares to cover that short position. Believe it or not, this sounds like the most plausible of all of the possibilities.
can't sirius just but back the shares in the open market say at the current price there by saving .45 minus .38 on the transaction. it would be like paying cash?
First of all, if an institution or fund wanted to buy or cover a short with that many shares - it would move the market price up too much to get them all at once at a low price like that...
Today's total volume was less than half that many shares @ 32 million........
Could they really be covering a large short position with this transaction? How does that work?
Since these shares are issued, I'm not sure they would show up in the average daily volume. So, in theory, a large short position could have been covered with the issued shares and we wouldn't be able to tell by the volume. That's a guess - I could well be wrong.
Whats up with the refinancing of 30 Million of the 300 Million in Feb debt?
Is this the way it’s usually done? Why such a small chunk of it? Wouldn’t holding off on an announcement until ALL the debt could be refinanced be better?
Does this leave doubts about the rest of the debt? Or is it a breadcrumb to show wallstreet that they WILL indeed refinance it in chunks?
I just don’t know. Of course news that it was ALL paid off in one go would be BETTER. But is this news of a small chunk of it a good sign? We’re up slightly after hours.