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Thread: WSJ: Echostar Acquiring SIRI debt

  1. #11
    Newman is offline
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    No, they would not have to report it.

    It is considered normal business investing, because they are not actually buying shares of the stock. You only have to report if you have entered into a material agreement or if you purchase a substantial number of shares. This WSJ article may save the company. Now that people know that someone is accumulating, the demand is higher and the price goes up, making it more expensive to buy the bonds, and thus the company.

    Yes, you can find out plenty of information about EchoStar... it is a public company. Look under ticker symbol SATS. Reuters is now quotingthe WSJ article. This is NOT good. The stock will get hit hard tomorrow...

    According to their most recent filing, they only had about 963 million in cash on hand with about 360 million in outstanding debt. If they are buying debt at a substantial discount, they have the possibility of having enug cash, but they would be SIRIUSLY strapped for cash with no gaurentee of being successful. (pun/misspelling intended)

  2. #12
    winagain35 is offline
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    Someone on the Y board posted that Echostar has about 1.4 bil in cash and about 6 bil in debt. I have not verified this information but it seems reasonable. One consideration... once it's discovered that Ergen is acquiring bonds, the bonds will get more expensive. This could create a bidding war.

  3. #13
    Newman is offline
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    About the lifetime sub: I was being dramatic, Sorry. Nothing would happen to it. The companies would keep operating even through BK.

  4. #14
    winagain35 is offline
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    One consideration is that a hostile takeover that wipes out the common shareholders could be bad for the current subscription model business. It would create a lot of pissed off people.

    The article clearly states that this "could be the first salvo" in a bid to take over the company. I think there will be much more to this story. Remember the WSJ is no friend to Sirius. Let's see how this plays out... Also - Mel has enough skin and pride in this game that he's not gonna let Charlie Ergen walk all over him. I just don't see it happening.

  5. #15
    sxminvestor is offline
    I think everybody has forgotten who is on now on the BOD of Echostar (Joe Clayton) Clayton signed Howard Stern, the NFL and hired Mel Karmazin.

    This could be a deal Mel is cutting with Joe and why does everyone think it's necessarily a bad thing ?

    I don't know enough about what it means to buy the debt, but just giving another possible scenerio.

  6. #16
    Newman is offline
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    Still trying to find a decent copy of the 10Q so I can read up on details.

    Interesting thing I found when going through the press releases: Joseph Clayton (one of the founding board members of Sirius) was hired o October 9, 2008.
    Last edited by Newman; 02-05-2009 at 01:29 AM.

  7. #17
    Newman is offline
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    According to the 10-Q released on November 10th, 2008 the company has 329 million in cash on hand and current usable assets of 1.02 billion.

    Not sure where the Yahoo poster is getting 1.4 billion.

  8. #18
    sxminvestor is offline
    Quote Originally Posted by Newman View Post
    Still trying to find a decent copy of the 10Q so I can read up on details.

    Interesting thing I found when going through the press releases: Joseph Clayton (one of the founding board members of Sirius) was hired o October 9, 2008.
    http://sats.client.shareholder.com/s...D=1193818-08-4

  9. #19
    just sirius is offline
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    newman

    I checked the balance sheet of Echo. Your numbers were correct. 960M in cash and short term investments. 300 something M in debt. Cash and equalivents were only 300M and change.

  10. #20
    Newman is offline
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    Quote Originally Posted by sxminvestor
    This could be a deal Mel is cutting with Joe and why does everyone think it's necessarily a bad thing ?
    It is not necessarily a bad thing, but has the potential to be crushing to current shareholders. From what I have seen thus far in their financials, I feel more comfortable with my investment. I do not think they have the ability to buy enough to force BK, and this may simply be exactly what it looks like: a business investment. I was looking at buying the same bonds, so I cannot fault them for that.

    It was just the potential that made this very scary for a moment... I am better now.

  11. Ad Fairy Senior Member
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