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Thread: Could Investors actually save the company?

  1. #31
    billhart22 is offline
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    exactamungo

    Quote Originally Posted by john View Post
    Newman, not to get picky but you must be very young. This economy is not a depression era economy. Secound it is not even the worst since the great depression. I say you must be young because you must not remember the 70s with Carter as President. Listen with as bad as it is now we still dont have unemployment nearing 10%, inflation at just over 11%, and intrest rates at over 20%, Lines a mile long to get fuel, ect., ect., I could go on and on about the Carter years. Sorry just had to clear that up. As a matter of fact, I believe one reason for this (how deep) recession is, if the media did not start saying we were in a recession a year and a quarter before we were actually in one, (to get Obama elected) people might have not gotton so scared and spent more. It is as they say, a self fullfilling profacy.

    P.S. The economy has a cycle look at history, we have a reccession once almost every 8 to 9 years.
    No disrespect to Newman here, but the rest I thoroughly agree with. I have been through the Carter administration......what a disaster.......I have been through recessions (I am not young). I have been laid off from Boeing because of recessions.

    Once again, I agree with Tripping as he has agreed with me, at least once, lol, that this is the way the mop flops in a free economy.

    But, at the same time, my heart sincerely goes out to people that got bent over with this whole deal. Like somebody said the other day, it must be "Gut-wrenching" and I really truly feel for you.

    The big wheel keeps on turning and it will get positive again. We are NOT in a depression, and as a matter of fact, this whole economy thing is really light compared to the other recessions. People will get bored with it and start buying again soon.

    I am confident that SIRI will come around, but I don't know for sure. I am in for the ride....if I lose it...oh well...If I re-financed my house for it, then I deserve what I get.

    Like Tripping who bought at .19, he doesn't have much to lose...I bought at .16, so neither do I, but believe me, I want to see everybody win!

    Friday's trading volume was light, but it seemed like everything came into a more orderly fashion. SIRI was actually acting like a stock. Check the chart out for Friday if you haven't all ready. The chart was so smooth and the shorts couldn't work their magic. This coming week "could be" a possible indication....MAYBE....but it will be worth watching on Monday.

    I believe the best thing for SIRI owners to do is Quit Selling! The investors are cutting their own throats for a wee little profit. Taking a risk to short a .13 stock is nuts in my opinion, but I don't know anything.

    Anyway, that is where my head is at...so I say long for Sirius and hold.

    Have a great evening.

  2. #32
    LIBOR/TED SPREAD is offline
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    Joined: Dec 2008 Posts: 65
    Tyler,

    Why are the Feb 09's trading for $.80 when the chance of default is close to zero as cash on hand alone will retire that debt if not refinanced?

    As for prepayment (lifetime sub) I informed a family member tonight and she couldn't believe for $300 she could have her factory installed XM set for life. She is calling Monday to get this done (she currently pays around $39/qtr). This will hurt the future earning a bit but may be the trick that takes out this debt headach (atleast thru May). We ONLY need to get thru MAY as the credit markets WILL not be frozen 1 yr from now. Don't expect spreads between T-bills and HY to be anything close to where they been over last 5 yrs but will be much better then the 2000 BP spread we see today!!!!

  3. #33
    Newman is offline
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    Joined: Jun 2007 Location: Dallas Texas Posts: 1,162
    Newman,
    You currently have no position in SIRI. Would you invest in these bonds?
    I for one, down almost 18k would not. I also don't think there are enough retail shareholders or institutions for that matter willing to invest in those bonds.
    Chuck
    I sold my holdings last week to collect the write off for tax season. Technically, under my plan, I would not be able to buy into these bonds, but yes, I would be willing to invest in them.

    Newman, not to get picky but you must be very young.
    You are right, I am young. I am 29 years old. I did not live through Carter, but my parents did. Perhaps it is just the "phase" they are going through, but they are getting hit quite hard. I say phase, because my parents just both recently retired. They are now living off of their 401ks because they do not qualify for pension or government retirement benefits yet due to their age. They have said to me how these are SOME of the worst times that they have lived through. I never said this was the WORST time since the great depression. I am smart enough to know that I don't know what it was like back then, but I am hearing from many people (more than just my parents) who have been around a while that these are very hard times.

    Quote Originally Posted by Tyler
    The idea seems great, but there is no indication of what types of participation would actually step up to the plate. To raise $900,000,000 at $1,000 each, there would need to be 900,000 investors as willing participants. If we assume 12% interest, that is a pretty penny going out the door each year. The short term hurdle will have been cleared, but cash flow would be impacted.
    You technically do not need 900k investors, because many people (such as myself, as well as many institutions) may be willing to purchase multiple bonds. Look at the February debt. Technically, all of the debt is broken down into $1000 bonds, and GS has like $140 million worth or something to that effect. Look at all of the institutions that to this DAY are still buying Fannie Mae or Fannie Mac bonds. Institutions can and will buy them, as long as there is a sence of security with them. For FM, you have the government backing. For Sirius XM? They would have to be secured to get that kind of commitment.

    As far as the interest rate, yes, it will be a rather large hit to Cash Flow. But how much of a hit? The December debt ($433 million) is already at 10%. An increase to 12% or 15%, while material, is not all that substantial, and it will get them through 2009 into years where they will be bringing in positive cash flow with the ability to pay off that debt.

    Lets use 15% as an example.
    The cost to the company in terms of interest on the December debt would come to 21.65 million annually in increased interest, assuming the full year worth of interest. Compare that with the synergies from the merger, which were quoted to be 425 million in 2009 "and growing".

    (I only give the December debt info because the interest rate on the XM bank loans due in May are not given)

  4. #34
    trippingthespeculatingpos is offline
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    newman im sorry to hear your parents are strugglin, i know quite a few who are as well, and if they arent they will be if things dont turn around soon. The sad part about this is that it always affects the retirees the worst, if your young you can see this as an opportunity, if ur at retirement age, u just plain old lost out.

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