Can someone with the time fabricate a scenario given the current deal that could stave off a reverse split by SIRI buying back shares?
i imagine this would include some increase in subs, increase in synergies, and added income from "best of" packages, the march 11th sub cost increase and the iphone app.
Thanks.
Reverse split, there's no reason to buyback shares (which they can't do anyhow because of the debt covenants). The Cap is already priced for bankruptcy still; at just $454MM and bankruptcy basically out of the picture -- it's likely not going to get much smaller after a reverse split.
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Just to get the party started, the below works out to $1.5billion
% of 20mil. subs:
10% get internet at $2.99
$5,980,000.00
25% pay $2 for family plan
$10,000,000.00
15% reup 2+ years to avoid cost increase
$933,000,000.00
synergies
$400,000,000
1 mil new subs ($144 for the year sub)
$144,000,000.00
If taken 1 for 1 that leaves 50% of the subs staying stagnant...
If all of the debt gets pushed to 2011 or beyond, then maybe by December they announce a buy back to bring the stock price up over $1.
Look, were at .12 today, anything is clearly possible
Blast away, i put barely any thought into the above and no real research, just swaggin. For fun. If you want to add in that aliens land at siri hq and drop off a $3.2billion, i'll accept that too (ok maybe not)
Direct from XM's credit facilities... their most senior debt:
SECTION 6.06 Restricted Payments. (a) The Borrower shall not, and shall not permit any of its Material Subsidiaries to:
(2) other than pursuant to a Parent Company Merger, purchase, redeem or otherwise acquire or retire for value... any Equity Interests of the Borrower (other than any such Equity Interests owned by the Borrower or any of its Material Subsidiaries) or any Affiliate of the Borrower (other than any of its Material Subsidiaries);
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