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  1. #61
    J56D is offline
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    Joined: Jul 2008 Posts: 172
    I am holding off on my vote until I see some reason to trust Mel & Co.

    Sirius share price is down 95% since Mel was hired on 11/18/2004.

  2. #62
    homer985 is offline
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    Joined: Mar 2008 Posts: 485
    JMM, yes, Newman is correct. Sirius already adjusted the XM license to what they believe is the current fair value for the license -- being $1.3 billion. The Sirius license is still carried on the balance sheet at the original purchase price of $83 million, though.

    Don't be concerned with this -- they are not doing anything deceptive. They're just following GAAP rules for valuing assets. In this case, it is valued at -- and carried at -- the purchase price of the asset. When Sirius merged (bought) XM, they valued the XM license at $1.3 billion as their purchase price, so it is carried at that amount. But since Sirius wasn't sold, the purchase price of $83 million remains the value on the books.

    My contention with this is that it gives a misleading valuation for those attempting to estimate the true stockholder equity in this company. We're not talking about a small discrepency here -- we're talking about a license that should have a fair value of $1.3 billion being carried as $83 million. But that's how GAAP rules are written.

    A poster on Yahoo pointed out a Chicago Tribune article to me one day that speculated that US companies may some day change the accounting of this -- and be required to revalue all assets annually to the then current fair value. That would obviously have a significant impact on Sirius' balance sheet.

    And so people don't think I'm blowing smoke -- go to the following link and read Note K in the Pro Forma attachment to the last 10-Q. There you'll see the adjstment of the value of XM's license - and what the estimated Fair Value range is...


  3. #63
    Newman is offline
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    Joined: Jun 2007 Location: Dallas Texas Posts: 1,162
    Another thing homer, is that Sirius valued the XM license at that individually, but the two licenses COMBINED probably are worth more than the 2.6 b, just because they own a complete nation wide block of spectrum.

  4. #64
    homer985 is offline
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    Joined: Mar 2008 Posts: 485
    From the above link:

    "The fair value of XMs FCC license was based on the Greenfield Method. The key assumptions in building the model included projected revenues and estimated start up costs, which were based primarily on the operating histories of XM and Sirius."

    They put the range for Fair Value between $1.0~1.5 billion... and did a pro forma adjustment on their books from XM's Book Value of $141 million to a Fair Value of $1.3 billion. So Sirius will carry XM's license on their books now at $1.3 billion.

    I deduced from this that the Sirius license should be equal in value to Xm's license, no?... meaning $2.6 billion for the entire 25MHz.

    The nationwide block aspect to it, really didn't factor since the use of the band and licenses are limited to DARS, for the most part. Which is also probably why Sirius valued it much less than the $5 billion that a similar amount of spectrum licenses went for in the 700MHz band.

    Worth more than $2.6 billion? I would think so, at least I did before the current economic downturn -- but I'm no expert. It's worth what somebody would pay for them. Considering that these are not only licenses -- but licenses for 2 fully built out systems (satellites, repeaters, uplinks, broadcast facilities and backup facilities)... I just think that they'd be worth more. But that's a different discussion -- I'm just going with the numbers we know from their filings.


  5. #65
    GetItStraight is offline
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    Joined: Sep 2008 Posts: 61
    Great contribution homer - I would disagree with a couple of things but great info none-the-less.

  6. #66
    CMEPCMEP is offline
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    Joined: Nov 2008 Posts: 1
    Quote Originally Posted by deewcom View Post
    I voted no on the board. No on dilution and No on the RS. I am doubtful that the board will be affected by my vote. That is a protest vote. I am doubtful also about the dilution and RS being stopped by the votes of the retail holders. Most will not vote. Not voting is a vote in favor. Right?
    On page 3 (hardcopy) of Proxy Statement under section "What vote is required to approve each item?", for items 2 (shares) and 3 (split), it states:

    "As a result, abstensions and broker non-votes will have the same effect as negative votes."

  7. #67
    APEXSPORTS is offline
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    Joined: Oct 2008 Location: cambridge,ohio Posts: 214

  8. #68
    GetItStraight is offline
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    Joined: Sep 2008 Posts: 61
    My opinion is that it does matter. I've seen crazier things happen.

    The fact of the matter is that insiders and institutional money have enough shares (votes) to pass it if they want.

    I would bet that a reasonable percentage of the institutional holders don't want it either. That in addition to the fact that a non-vote counts as a no vote gives us hope and a fighting chance to stave off the R/S and added dilution.

    Just my opinion.

  9. Ad Fairy Senior Member
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