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Thread: Can Sirius/XM executives buy stock now?

  1. #1
    spanyo is offline
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    Can Sirius/XM executives buy stock now?

    Not sure about the SEC rules, but it would be nice if Mel and Gary could buy a few million shares on Monday to help strengthen the price.

  2. #2
    stegersharp is offline
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    Sirius filed this document with SEC on Friday

    looks like they can sell now. As far as the BUY........NOT sure yet

    Sirius Satellite Files Common Stock Shelf >SIRI

    Jul 25, 2008 16:58:32 (ET)


    DOW JONES NEWSWIRES

    Sirius Satellite Radio Inc. (SIRI) Friday registered with the Securities and Exchange Commission to sell from time to time an indeterminate amount of common stock.

    The company or certain selling stockholders may sell shares together or separately on terms that will be determined at the time of offering, according to the SEC filing.

    The company said it intends to use the net proceeds for working capital and general corporate purposes.

    No underwriters were listed in the filing.

    Shares of the company closed Friday at $2.25 each, down 17 cents, or 7.02%.

    -Denise Jia, Dow Jones Newswires; 202-862-1359; denise.jia@dowjones.com

  3. #3
    crfceo is offline
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    It's a regstration statement under rule 462e that has to do with creating a new class of security. It's to issue preferred stock for the merger exchange with xm preferred shareholders. It also gives the preferred stock holders the right to sell their shares.

    I'm guessing that they may issue extra preferred to raise extra capital. The only question I have is whether or not that would be dilutive to common...I'm drawing a blank in memory, so I need to look it up...too early in the a.m. I dont think its dilutive off the top of my head...

  4. #4
    hartleib1 is offline
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    It looks like it will be dilutive to me , but what do I know shit for brains and all....................nice quite funny!!! LOL

  5. #5
    hartleib1 is offline
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    There is a diluting potential that does exist. The board has authorized an extra 200 million shares, on what will be a 3 billion share float. Relatively speaking it would be very small, not massive as the fear mongers would have you believe.

    A look into Mel's history reveals a man who is dead-set against dilution! With Xm having refinanced their debt recently, the need for dilution has been reduced greatly.

    The recent filing has to do more with a preferred stock offering for the xm preferred exchange. Sirius has issued ZERO preferred stock and as such must create a new class of security to swap with xm preferred holders.



    It looks more like over 500 million to me!

  6. #6
    crfceo is offline
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    500 million? Interesting theory...could you explain your reasoning for such an assumption? Theboard has only authorized UP TO 1.7 in connection with the merger. 1.5 billion is for the merger. This leaves only 200 million possible.


    Stock dilution is a general term that results from the issue of additional common shares by a company. This increase in common shares of a stock can result from a secondary market offering, employees exercising stock options, or by conversion of convertible bonds, preferred shares or warrants into stocks. This dilution can shift fundamental positions of the stock such as ownership percentage, voting control, earnings per share, value of individual shares. A broader definition specifies dilution as any event that reduces an investor's stock price below the initial purchase price.

    Impact of preferred share dilution

    Preferred share conversions are usually done on a dollar-for-dollar basis. $1,000 face value of preferreds will be exchanged for $1,000 worth of common shares (at market value). As the common shares increase in value, the preferreds will dilute them less (in terms of percent-ownership), and vice versa. In terms of value dilution, there will be none from the point-of-view of the shareholder. Since most shareholders are invested in the belief the stock price will increase, this is not a problem.
    Last edited by crfceo; 07-27-2008 at 10:46 AM.

  7. #7
    homer985 is offline
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    Quote Originally Posted by crfceo View Post
    500 million? Interesting theory...could you explain your reasoning for such an assumption? Theboard has only authorized UP TO 1.7 in connection with the merger. 1.5 billion is for the merger. This leaves only 200 million possible.
    The "up to" 1.7 billion is for the conversion of all XM equity instruments... the current Class A shares, the Series A shares, the Warrants, the employee stock options, employee 401K, plus the convertible debt. There is no "extra 200 million possible". This 1.7 billion is for the XM conversion.

    The Sirius Board (after the Sirius shareholder vote) increased the outstanding available shares to 4.5 billion. Sirius has 1.5 billion outstanding -- they're issuing 1.5 billion to XM holders (roughly) -- and MUST reserve the remaining 200 million (or so) for XM's convertible debt and other convertible optioins.

    Sirius' BOD can issue all the common and preferred they need -- via their current (and older) shelf registrations. And now they have plenty of room to go add more, if they need.

    XM (as a subsidiary) will not need to raise additional funding after they complete their refinancing as part of the merger -- all of the older debt is being refinanced... plus it will leave them with plenty of cash to continue operating. I am unsure of how the other subsidiary (Sirius CD Radio) is doing funding-wise, though. They have satellite CapEx that needs funding.

    Regardless, as you noted the new Shelf Reg is for the Preferred share, which go to GM -- who is the sole owner of XM's Series A shares. Do not expect them to sell them any time soon -- it is this holding that continues to give GM so much leverage over XM.

    Other than that, the "extra 200 million" is for the XM conversion -- as they need to "reserve" these shares for XM's yet to be exercised convertibles.



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  8. #8
    hartleib1 is offline
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    Thanks Homer that makes me a little less concerned.

  9. #9
    homer985 is offline
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    XM currently has 319.5 million shares outstanding... plus this statement:

    "Options, warrants and convertible instruments outstanding as of June 30, 2008 to purchase 49.4 million shares of common stock (47.7 million of which were vested) were not included in the computation of diluted net loss per common share for the three and six months ended June 30, 2008 as their inclusion would have been anti-dilutive."
    319.5 + 49.4 = 368.9

    Assume all 368.9 million convert at 4.6:1 = 1.69 billion shares.

    So you see, although XM has 319.5 million shares outstanding that are going to convert into 1.47 billion shares of Sirius... XM has another 49.4 million that are reserved for various convertible reasons. That is an additional 227.2 million shares of Sirius that need to be "reserved".


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  10. #10
    crfceo is offline
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    Thanks Homer!

    It's nice to be on the same team now! I did not consider that....but you already know that don't you?

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