Proxyovte.com

[Demian]

These numbers are purely based on the ProForma attached to the last 10-Q. It will obviously change with the next filing this week.

So it doesn't include the 2 recent debt for stock exchanges?

[homer985]

Sorry, didn't mean to dodge the question... the numbers are based on numbers as of 6/30/08. The merger closed the first week of August, so no -- it would not include the new debt issues.

However, it is important to remember that those debt issues were used to retire old XM debt. It won't be a 100% swap -- but fairly close. The overall debt amount would have increased very slightly.



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[Newman]

• The proportion of unissued authorized shares to issued shares could, under certain circumstances, have an anti-takeover effect. For example, the issuance of a large block of common stock could dilute the stock ownership of a person seeking to effect a change in the composition of the board of directors or contemplating a tender offer or other transaction for the combination of the company with another company.

This is a HUGE statement. For Tyler, Homer, myself, anyone else that is fearful of a hostile takeover: An increase in shares may also thwart a hostile takeover. The company can hold shares, and then issue them to dilute the hostile company's shares, lessening their influence and power over the company. That is something that I had not thought of.

[Newman]

Newman, when you say available -- what are you referring to? Did you mean shares available to be issued? Or shares registered for issuing?

What I'm getting at, is that Sirius has 3.2 billion shares outstanding and I believe another 500 million reserved for issuing for current convertible instruments. However they are authorized to issue up to 4.5 billion shares currently -- so they do have the ability to issue another 800 million shares at any time.

So if that's what you're talking about -- that there isn't a high enough ceiling, then I agree with you. But if you're talking about registering shares -- convertible debt is typically issued before the shares are registered for issuing. They could issue 800 million at $0.25 each via a convertible, to raise $200 million.

Also, neither of Sirius' convertible debt issues are secured, they're both unsecured bonds.

Homer, regardless of what numbers I am using, they are still only "have" 1.3 billion shares that are not issued. If they sold every single one of them for Friday's closing price of 0.26, that would only get them $338 million, which would barely touch their debt, and leave them with no shares available.

If you want to completely wipe out 2009 debt by issuing shares (forget about the converts for now) you would have to issue almost 3.9 billion shares, diluting current shareholders by more than half, but also wiping out half of Sirius's debt.

[Newman]

Newman,

Please explain to me why we would want to issue another converable bond. So that we can lend them millions more shares to short and drive the price to oblivion? Isn't this what drove the current price down from $2.50 to our current price of 26 cents?

Keysmark: At the end of the merger, the XM converts would automatically convert to Sirius shares, however XM shorts would NOT automatically convert. In order to get the deal done, Sirius had to loan these financial institutions shares of SIRIUS to short, because Sirius was on RegSho, and there were not a large number of shares to short.

In this instance, Sirius would be issuing the converts, but not loaning any shares. The institutions would have to find the shares themselves and short them if they wanted the arbitrage to play it safe. Also, because they would be paying off other convertible bonds, that takes out a portion of the dilution because once the convertible bond is recalled, those shares are effectively eliminated from the share count. (though many more are added due to the new convert)

[Keysmark]

Newman,

Thanks for taking the time to explain this to me. This is so much more sophisticated than I have had experience with.

Keysmark

[Newman]

Hey, I have never even taken a finance class in college... so don't feel bad.

I am self-learned, with the help of many on these forums like Tyler and Homer.
**which also means you should take what I say with a grain of salt**

[Keysmark]

Well, I'm finished for the evening.

Good luck to us all tomorrow.

Keysmark

[jmm232]

Homer,

In your valuation for the licenses, wouldn't it be $2.6B if you are valuing each license at $1.3B??

[Newman]

I beleive with the way the SIRI Q2 call was done, the value of the XM license was already included in that, so he only had to adjust for the value of SIRI license.

Homer can clarify though, but thats the way I understand it.