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Thread: Could this price drop be by design?

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  1. #9
    homer985 is offline
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    Joined: Mar 2008 Posts: 485
    Quote Originally Posted by john View Post
    With the credit market the way it is, it is not a bad way to get the deal and the rest of the financing done. I guess some would rather have an out of control interest rate to pay on 500 million. I find it a good way to lower the dept and keep the cost down. Who likes paying that much interest.
    That was kinda my point in the other thread... they're already paying a 13% coupon on the new $700 million; plus a 10% coupon on the older $400 million... adding this $550 million to buyout the rest of the debt and the transponders on XM-4, would likely have a very high coupon too -- since these new notes will be subordinate to everything else.

    By doing the share loaning agreement, it allows the buyers to hedge immediately -- thereby, they probably got a better coupon... we'll know soon enough.

    It's interesting though, reading the news stories -- they're all wrong. For example...

    Carl Gutierrez at Forbes says that Sirius did a stock offering and sale to raise $375 million... and they even got Frederick Moran at the Stanford Group to say that it was a great way "to give Sirius some financial flexibility"! Really Fred??? Did you read the press release?
    http://www.forbes.com/2008/07/28/sir...rtner=yahootix

    Bob Holmes at the Street took the idiocy a step further to say that "Sirius will sell..." to raise the $375 million. Um Bob, no they're not.
    http://www.thestreet.com/story/10430...ns-update.html

    Do any of these guys actually ever read the SEC filings any more? Or pick up the phone to call the companies to ask them what this means? These are the top 2 stories right now for BOTH companies... and the facts in them are DEAD WRONG!

    Tyler... there's your new headline for the blog. Somebody should write up a commentary about the state of financial reporting -- or at least how blatantly wrong these stories are.

    Make sure to email Carl and Bob links to it so they can see their screwups... Carl's email is: cgutierrez@forbes.net and Bob's is: twocents@thestreet.com


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    Last edited by homer985; 07-28-2008 at 07:33 PM.

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