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Thread: Just an opinion.

  1. #1
    john is offline
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    Just an opinion.

    I have been thinking about this crap ass deal, and I have come to a reasonable conclustion that makes sense to me. Yes it still includes a large COH and even FCF positive for the 4th Q of 2008.

    I first think that Mel was planing on originally taking care of all the debt without any deal from any other company taking any major stack in SIRIXM. By using COH, dilution, extention of credit facilities and yes even reconverting some of the old converts for way better terms if needed.

    I believe Charles Ergen Fricked the whole thing up. Until then Mel had it all under control the reason is simple, there was two possiblities for the 2 banks holding the credit facilities that needed to be extended. First extend and wait a few more years to get all their money back or dont extend and drive SIRIXM into bankruptcy. Then fight with all the other debt holders to maybe get pennies on the dollar some time down the road or even get restructured by a judge into a even worse term loan for the banks. There really was only one choice that was to extend the credit facilities. Now though with the banks having a choice between Ergen and Mel, that was simple for them they would have taken Ergen. Mel could not even say I will bankrupt the company because the banks would have been fine with that knowing they had someone else that would give them much more for the debt then a bankruptcy judge because they now had a buyer for the crap that SIRIXM owned that only could be used for satellite radio. As proof of this there were several articles that stated comments from many of the debt holders that: they would like nothing more then to work with Ergen. So now what does Mel do, he doesn't have enough COH even if the 4th Q brought in more FCF to pay off not only the remaining Feb debt but now the May debt that will not be extended. So he comes up with a deal with Malone that extends the remaining Dec. converts to keep those out of Ergens hands. Then buys the remaining Feb. debt leaving Ergen with little say in any bankruptcy proceeding. So now that leaves the Banks holding the credit facilities due in May back to the original decision of taking the company into bankruptcy and again only getting pennies on the dollar or extend. It is this reason they could also get by without a shareholder vote not because of Feb. debt but because the Banks would not extend as long as Ergen was in the picture. Mel could not pay it all off and still have enough to do day to day operations even with the most optimistic FCF positive projections. I believe that was why the deal was structured the way it was (in 2 parts) and why I cannot account for the loss of 360 million in COH (because they did not lose it it is still there). Now Mel also has the capital to put that satellite up that they have said was going up in the fall.

    I guess we will see if I am right, because on the 17th if they still show 360 million in COH and/or have a FCF positive of some kind that pretty much only leaves the logic of what I just came up with.

    It is the only logical thing I can think of.


    P.S. While I still think the deal sucks. It was Ergen that raped SIRIXM. Malone was the one who at least gave SIRIXM a dinner and dancing before doing it
    Last edited by john; 03-07-2009 at 02:36 PM.

  2. #2
    OldDruid is offline
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    That makes sense!

  3. #3
    frigginregan is offline
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    Sounds plausible to me. You can look at the crap luck Sirius has had one of two ways. From a company/customer perspective or from a shareholder's perspective. From a company/customer perspective all these crazy deals are GREAT in that they've kept the company alive. But from a shareholder's perspective it sucks, because it always seems like we've gotten the shaft.

    If the above scenario is true, it's to Mel's credit that he was able to keep this ship afloat. And in that regard, you have to admire the guy.

    But again...to paraphrase Mel, it's "SUCKED" to have been a shareholder.

    Hopefully removing the 2009 debt will trump all the dilution and the "ugly" Liberty deal in the eyes of Wall Street, and we will start to rise again. Slowly of course....but rise at least.

    Is the huge decrease in short selling a sign of good things, or will it mean we will wallow at this price until Mel is forced to do an "UGLY" reverse split?

    Only time will tell. :-)

  4. #4
    john is offline
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    frigginregan, I have said this before I think most of the people shorting the stock now and before were the debt holders doing it to protect their investment. My point being the only short sqeeze you are going to see is when the converts get bought out.

  5. #5
    Wirestripper is offline
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    John...........

    I concur as well with your assumptions.

    They fit like a glove with what I know and what I have surmised.

    Mel was defending and not trying to damage the company to save his own ass as some have voiced. That is whyI am still long and have not sold a single bit of by position, even thoughI could have gotten out with my investment intact. That is why I bought more to bring my basis down in spite of the fact that this has never worked for me. Not one time.

    I don't think that I have "hope", a term that I despise in stock trading. I think I am falling in behind Mel, who is a man I don't want to stand in front of.

    Thanks for your confirmation of my own take on SIRI.




    (edited for typos)
    Last edited by Wirestripper; 03-07-2009 at 03:01 PM.

  6. #6
    cos1000 is offline
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    Well said John and probably pretty close to what actually happened... My only caution is not to put to much into the 4Q giving us much insight as to COH as of the 17th. The numbers we get will be reported as of Dec. 31, 08. We will be two weeks from the Q1 close and 45 -60 days from their reporting the numbers we really want to see.... COH as of March 31, 09

  7. #7
    relmor2003 is offline
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    Once again, this assumes Mel and Clayton left on "bad terms" which we have no proof this happened. Still very suspicious, the whole mess, and it worked into Mels favor for getting to...
    1. Keep his company.
    2. Work and partner with a company not looking to run day to day operations, and still has synergies and partnership deals that benefit both companies.
    3. Stay out of BK court.

    The one clue that we have that invalidates the "Malone last hour saving, and the need to circumvent the vote", was the leak that since Dec. Ergen and SiriusXM were in discussions. This gives Mel 2 full months to communicate with stockholders, and offer then both deals to choose from. As he did not do this, he legally violated his agreement as CEO, and did not function is SHolder interest, but his interest and the current board interest. Since the board, and him own less shares combined than Apollo and other institutions, I would assume both deals were presented to them, and they decided that Malones was better for them. That being said, the Ergen deal comes with huge"conflict of interest" as Clayton was on SiriusXM's board months prior, knew its underlying financial situation, and therefore illegally enacted upon that information to gain "an upper hand" in negotiations. As Mel has not sued Ergen or Clayton, I cannot assume the deal makers involved "Malone, Mel and Ergen " were not all working together. I feel they were , and all this was orchestrated simply to bypass a sticky vote, lower the SP even more, and ease the transition of ownership from retail investors to big money. Look at the buyin date and price the board enacted(.12 cents) the timing(during the "BK scare, and uncertainty of its future). Etc.. as further proof of my allegations.
    In a perfect world, were everything is cut and dry, and no consipracies abound...
    Yes John, I completely agree with your timeline and assessment. Since thats the only "constructive" avenue to take going forward as an investor at this time, your information is more "useful" than mine at this time forward. Since its all over now, done with, and no going back, I would find use in both scenarios and views, but to invest accordingly going forward, we must assume your version is correct, or be forever crippled in making intelligent decisions going forward(as you cant trust your own board and CEO, then why invest in this company? right?). Well I trust them to the point that I feel they no longer have an interest in undermining our information stream, and keeping us out of the loop anymore, and they can now focus on stock holder value, and the product, and growing the business from this point forward.
    Last edited by relmor2003; 03-08-2009 at 03:30 PM.

  8. #8
    killerkaul is offline
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    888's { JOHN }, ..........................sounds of howling, and much clapping and whistling................ ..the Dog just brought you a bone ! .... killer.

  9. #9
    john is offline
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    cos1000, thanks, Just so you know I am not saying that they did not have some kind of cash burn in the 1st quarter. What I am saying is that with 360 in COH and most likely a pretty big FCF positive from the 4th quarter (which I am back to thinking will be bigger then many think), That on a proforma basis there is no way they had more of a cash burn then 1st quarter of 2008 (not with all the cost cutting thats been going on). Which still leaves them with most of the COH from before and FCF. I think the street (at least the MSM) thought they had little to no COH from what was reported before about bankruptcy and not being able to pay Feb debt. I think it is going to be a surprise TO THEM to see just how much COH SIRIXM still has.


    relmar, I deal in logic when I make assumtions about something. That until someone has REAL proof that Mel is evil or doing something criminal I will go from what I have read about him and that tells me he is not, that he is the kind of person that once you think you have down, pulls something out of his ass to turn you on your head. I believe he was pissed at Ergen for trying to take SIRIXM just as it is coming to the end of the tunnel. That he basically said, listen you dumb ass I am not going to reward your under handed actions by just letting you take the company.



    killerkaul, thanks, and just remember when has my logic ever let you down. I am just saying that I was so confused about much of this, with the COH and the FCF, that nothing that the MSM was reporting was making sense. After looking at it all it became so clear to me it all makes sense now. I am so confedent in that assumtion above that I think they still had the 360 million of COH and had a pretty decent FCF positive number from the 4th quarter. I think the street if they believed all the MSM about filing bankruptcy because of Feb debt are going to be really surprise at just how much cash SIRIXM still has to work with. How much will the PPS go up when everyone finds out, I dont know. Just think how most would feel about it if they were to say yes we have as of the end of the 4th Q 420 to 520+ million. I say that because even 520 million would not have been enough to get them out of trouble if they could not get the banks to extend the 350 million due in may. Also the thing that gets me thinking this is, they still have not pushed the date back for the satellite they plan on launching in the Fall, and they are going to need quite a bit of cash for that.


    P.S. killerkaul be ready because most people are not going to understand (if my conclusion is true and they didnt bother to read it) if they had that much COH, why were they saying they would have to file bankruptcy because of Feb. debt. Mel is going to say first of all SIRIXM never said anything about having to file because of Feb. We basically stated that the Malone deal needed to be done to stay out of bankruptcy, that those are two totally different things
    Last edited by john; 03-08-2009 at 06:57 PM.

  10. #10
    just sirius is offline
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    Red face

    John

    Thanks for the timeline. Sounds pretty plasuible. However, I think that when Ergen put Clayton on the BOD at DISH/ECHO, he tipped his hand to Mel, allowing Mel time to begin a contingency plan. I strongly believe COH will be in the vinicity of 450-500M. What do you think the chances are of being FCF for all of 2009? IMHO I believe that we will begin to see new revenue streams begin to flow from multiple platforms(Iphone App, DTV packages, internet etc) coupled with renegotiated contracts to increase bottom line potential!

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