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Thread: Nowhere To Go - by Spencer Osborne

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    Sirius Roadkill is offline
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    Nowhere To Go - by Spencer Osborne

    Below is a forum post by Spence that got buried under yesterday's news of record volume. I have reposted it here because it IS something worth discussing and since I "bumped" his original post, I did not want the topic to be permanently overlooked by being in the Stock Thread . . .

    Obviously Mel has got to keep a lot of balls in the air right now (Liberty increasing their ownership stake, the $1 Delisting Notice/Appeal Hearing, Addition to the NASDAQ Q-50, Relmor firing warning shots across the bow and of course Howard Stern)

    So here's Spence's post:


    By - Spencer Osborne

    On Wednesday April 7, Stern discussed the Sirius XM customer service stance that, "Stern will be back, he has nowhere else to go."

    Now some of this is hyped by Stern, that is for sure.....however, there is an issue with customer service telling consumers that Stern will be back. The fact is that they don't know yet, and to tell consumers misinformation is simply wrong.

    Not only is it wrong, but it gives Stern MORE ammunition in his negotiations with Sirius XM.

    The fact of the matter is that the Stern issue needs to be solved prior to the Q4 retail selling season. The company will have a "moral" dilemma of a Q3 and Q4 advertising campaign that touts Stern when he may not yet be signed. Thus, they will likely have to do a campaign without Stern, which in and of itself will raise even more questions and concerns.

    It is for this reason that the company needs to resolve this in the next 3 to 4 months, or risk having to advertise without the ability to tout Stern.

    If Stern is not signing, the company can focus and promote alternative content.

    The bottom line is that customer service needs to be put under more control, and Sirius XM needs to get to a decision on the Stern issue. Time is ticking
    Last edited by Sirius Roadkill; 04-08-2010 at 01:52 PM.

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    john is offline
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    I have to disagree here, SIRXM can adverdise Stern in the third and forth quarter there is nothing from stopping them, STERN WOULD STILL BE WITH THEM, and until he is gone there is nothing wrong with adverdising that he is on SIRIXM. I would like to ask you to give me one example where anyone has stopped adverdising a personality until they are gone. Hell I have seen shows make the mistake of advertising personalities even after they have left (all be it not for long). There is another clear example here, anyone remember "The Love Sponge"


    P.S. I am not so sure about that volume being because of Liberty ether. I seem to recall something about them being restricted for another year on that and another 2 years before they can get more then 50%. I have not read the agreement in a while, so I could be wrong though.
    Last edited by john; 04-12-2010 at 10:27 AM.

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    Sirius Roadkill is offline
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    Quote Originally Posted by john View Post
    I have to disagree here, SIRXM can adverdise Stern in the third and forth quarter there is nothing from stopping them, STERN WOULD STILL BE WITH THEM, and until he is gone there is nothing wrong with adverdising that he is on SIRIXM. I would like to ask you to give me one example where anyone has stopped adverdising a personality until they are gone. Hell I have seen shows make the mistake of advertising personalities even after they have left (all be it not for long). There is another clear example here, anyone remember "The Love Sponge"


    P.S. I am not so sure about that volume being because of Liberty ether. I seem to recall something about them being restricted for another year on that and another 2 years before they can get more then 50%. I have not read the agreement in a while, so I could be wrong though.
    First on Stern, I had posted this in the forums months ago and will say it again . . . I would let Stern twist in the wind for the next few months and make him come in to work pissed-off everyday . . . then do whatever it takes to re-sign him to another 5 year deal (disclosure: I am a Stern fan; have been listening since the days of "Butter Buds Sprinkles;" that is longer than some of you are old).

    All of what we are seeing now is little more than posturing and it makes for good free press.

    As to Liberty, they may acquire up to 49.9% at any time which amounts to something on the order of 600,000,000+ additional shares of common equity; based on filings recorded as of this post, Liberty holds a 40% ownership interest exclusively via Preferred Shares which are convertible into common.

    The 600,000,000 single-day share volume recorded last week is well-well above the normal "high-volume" watermark of 250,000,000 shares traded and imo is NOT due to any kind of technical breakout.

    Using common sense and logic you first have to consider that a HSR Act filing granting "Early Termination" was published on or about March 31, 2010 . . . if you couple the HSR Act filing with the 600,000,000 single-day share volume recorded last week, and place that volume in context with all other times that this equity has traded anywhere close to that volume, you must conclude that a newsworthy event has occurred.

    I am NOT saying that Liberty has acquired all of the shares they are permitted to in one shot, nor am I saying that they are finished acquiring or even that they will acquire a full 600,000,000+ shares to bring them to 49.9% . . . but I am saying, imo, that they have been buying

    As to when they will file, I am not an expert in SEC regulations . . . I would assume that Liberty is executing their buy-orders through a series of regulated intermediaries and that they might not be required to file until they legally take possession of the shares held by intermediaries . . .

    Back to the Investment Agreement . . . on or after the Second Anniversary of the Investment Agreement (Feb 2011), Liberty is permitted to make a tender offer for all outstanding shares not beneficially owned by them at some premium to the prior day's close. After the Third Anniversary of the Investment Agreement (February 2012), all standstill provisions expire.

    If Liberty is in fact going to make a Tender Offer, it would likely occur sometime between February 2011 (the 2nd Anniversary of the Investment Agreement) and August 2011 (the Expiration of the Shareholder Right's Plan/Poison Pill); Basically, Liberty has (imo) what amounts to an "exclusive" 6 month negotiating window during that time . . . after August 2011, other suitors could come-a-callin.

    Many comments I read at other sites are totally dismissive of the possibility of Liberty tendering . . I believed from day 1 and believe now that Liberty's attorneys did not craft the precise language of that Investment Agreement by accident and that Mel and the Board did not consent to it without a full appreciation of its implications.

    but what do I know . . . just my opinion based on what I see . . . dyodd

    and one more thing while I'm on it . . . will people stop already with the "but Mel owns all those shares he bought at a much higher cost basis" . . . please, stop already; last Spring Mel was given 120,000,000 options at $0.43; Mel will be ok . . . the value gained on those options will more than offset any losses on the common shares that he has already purchased at a higher cost basis.

    It's called "being made whole" through the backdoor . . .
    Last edited by Sirius Roadkill; 04-12-2010 at 10:01 PM.

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