So you have heard it yesterday that Sirius is given notice about under $1 price for 30 days in a row. Sounds little too late notice, isn't it ? Afterall it's been under $1 for a really long time this year. And, siriously every 'investor' knew it all along, including John Malone from the begining that by March 2010 they have to be above $1. Let's read the management's reading here.
- reverse split is no brainer. Do a 1:2 reverse and boom you have Sirius trading at $1.34+ at today's price. Do a 1:10 and boom you have Sirius trading at $6.7+ at today's price. The fact that management was not doing a reverse split all along this year clearly shows that they are LONG OPTIMISTIC on the stock performance on it's own merit to drive above $1. They certainly know more from the models they build about where company will land in next 6 months.
- But what's the harm in reverse split ? The moment the stock goes above $5 mark, mutual funds and institutional investors jump in and start acquiring a good chunks. Stock goes up. So why management is not for it, at least yet ?! Well, that's the insider scoop. Malones and consortium of wealthy individual investors want to build their base beyond 40% and they can only do that easiy before MF and IIs jump in. That to me is a big plus if you want to get the pulse of the company and where they are placing Sirius on the radars.
The way I see it, it's win win both ways. No reverse split means something big cooking inside and stock goes up. Rever split means MF and IIs drive the stock price higher. Delisting is out of question, so please save your panic selling.
I love this day. Finally, we will see Sirius popping all of a sudden in next one month. Cover your shorts, siriously !!!!