View Poll Results: Should Sirius do a reverse split and if so how much

Voters
16. You may not vote on this poll
  • Yes

    2 12.50%
  • No

    13 81.25%
  • Unsure

    0 0%
  • 1 share for every 2 outstanding

    0 0%
  • 1 share for every 3 outstanding

    0 0%
  • 1 share for every 5 outstanding

    1 6.25%
  • 1 share for every 10 outstanding

    2 12.50%
Multiple Choice Poll.
Page 1 of 3 123 LastLast
Results 1 to 10 of 23

Thread: Reverse Split - Good or Bad?

  1. #1
    J56D is online now
    Enthusiast
    J56D's Avatar
    Joined: Jul 2008 Posts: 160

    Question Reverse Split - Good or Bad?

    I have never been a fan of reverse splits and I am not sure that I favor it for Sirius. It can be done for several reasons, such as to avoid delisting, but another reason to do it would be to decrease the size of the float. You have limited editions in collectibles, be it baseball cards, art prints or whatever. This usually results in the limited editions value to have a premium over the general product.

    My question is this, and Brandon I would especially like your take on it:

    Are there just to many available outstanding shares of Sirius to have any kind of meaningful rally? I have seen too many high dollar or large share trades of Sirius stock that didn't even register a blip on the radar screen.

    Which would be worse a reverse split or delisting?
    Would there be a major sell off because of a delisting by Mutual Funds and Institutions?

    I am not advocating a reverse split: just looking for opinions and a debate on the issue.


    Newman makes a good point below and one that I hadn't thought of when he said "There is really no way the NASDAQ can delist the most actively traded stock in the entire market".

    Demian - Right now I do not have a lot of faith in Mel but who else would be any better? What he said was that "we have no plans for a reverse split". He did not rule it out. I still have to question the number of outstanding shares.
    Last edited by J56D; 10-14-2008 at 01:36 AM.

  2. #2
    Newman is offline
    Mentor
    Newman's Avatar
    Joined: Jun 2007 Location: Dallas Texas Posts: 1,162
    I too have never been a fan of the reverse split. To me, a reverse split cries of despiration, even though it means nothing as far as value goes. Sure, some companies have executed well after a reverse, but for the most part traders are used to a stock trading in a certain range, and it will eventually trade in that range again unless the fundamentals change.

    It would be hard for me to see a reverse split as anything other than despiration. My vote is no.

  3. #3
    GetItStraight is offline
    Member
    GetItStraight's Avatar
    Joined: Sep 2008 Posts: 61

    No

    Newman,

    You said it best.

  4. #4
    frigginsirius is offline
    Junior Member
    frigginsirius's Avatar
    Joined: Oct 2008 Posts: 29
    No! No! No!

    And DEFINITELY NOT in THIS economic crisis and BEFORE Sirius has even refinanced.

    Are u kidding me?

    Do you realize what would happen if Sirius did a 10 to 1 reverse split to $5 in the middle of this market meltdown and credit crisis?

    Goldman and the shorts would BASH this back down to below a buck before you could say NAKED SHORT!

    You'd be GIVING them up Sirius on a silver platter.

    Let Sirius refinance the debt. Give them a few quarters to show Wall Street, and I bet you won't be talking reverse split.

    I know we ALL want to see Sirius at $5 again. But not THAT way.

  5. #5
    Newman is offline
    Mentor
    Newman's Avatar
    Joined: Jun 2007 Location: Dallas Texas Posts: 1,162
    J56D: You ask what would be worse, the reverse split or delisting.

    The problem with that argument is that delisting is not a definate. As it is, NASDAQ is looking at extending the amount of time that a stock can be below $1 before it is delisted. At this time, the length of time a stock has to be under $1 to get a delisting notice is 180 days. At that time, the company will get a delistment letter and will have 60 days to appeal. Once they file for the appeal, they get a hearing. How long that hearing takes? Who knows... there is no time frame on that. That means that at a very minimum, from the time the stock goes under $1, a company will not be delisted for at least 5 months, plus however long it takes to get the hearing.

    Not only that, a stock price is not the only deciding factor about delistment. There is really no way the NASDAQ can delist the most actively traded stock in the entire market. This is known as "trading equity" which is also looked at during the appeal.

    I do not think delistment is an option.

  6. #6
    deewcom is offline
    Enthusiast
    deewcom's Avatar
    Joined: Jul 2008 Posts: 166
    If SIRI does a reverse split, I'll be shorting it myself. SIRI is still exposed to the ravages of Naked Shorting. There have been NO penalties assessed. It is criminal that Goldman Sachs and other financial institutions are now protected from short selling while they themselves short sell everything in sight. The past past eight years have been a short player's game.

    If the SEC really wanted to help to improve the market, ALL short selling should be temporarily halted. Evidentally too many friends in high places would be pissed off.

  7. #7
    Demian is offline
    Mentor
    Demian's Avatar
    Joined: Oct 2008 Posts: 2,320
    Mel already said clearly that there would not be a reverse split! Do you think he has any plans to go back on his word?

    Here is his comment during the Q2 earnings conference call...

    Mel Karmazin

    "We are well aware that the stock price has suffered. I am not pleased with the market reaction. You have all seen my own public purchase of 2 million shares this week. I had been restricted from buying Sirius stock from the time I began merger discussions, which was over two years ago. The bottom line is this -- Sirius received FCC approval, accomplished the financing, and closed the transaction. We intend to work very hard to deliver on the value of this merger and meet our objectives. Third, we have no plans for a reverse split. Itís hard to see how that would add any value to our company.Fourth, we are working on the combined companyís fourth quarter offerings at retail and you should anticipate that the best of both packages will play a very large part in those plans, which should stimulate after-market demand. Stay tuned."

  8. #8
    john is offline
    Guru
    john's Avatar
    Joined: May 2008 Posts: 2,836
    A reverse split is not a bad thing, the reason most do it and it fails is because there was nothing else that changed in the company. It has worked out for other companies because they made changes along with the reverse split. A example is JDSU the new CEO was suppose to take the company in a different direction that did not work out. The reverse split worked out well for others because they also had a catalist along with it. I dont think there is anyone here that can say SIRIXM does not have, not only one but many new catalist.

  9. #9
    Demian is offline
    Mentor
    Demian's Avatar
    Joined: Oct 2008 Posts: 2,320
    I have heard it said that some institutions can not buy stocks at this share price. I have heard it said that some institutions can not buy stocks under $5. I wonder what percentage of institutions have these rules. Does anyone know? If this is the case, I can understand the argument for a RS. Stocks under $4 can not usually be bought with margin either. If the sock was over $4, would that bring in more institutions and margin buyers?

  10. #10
    spanyo is offline
    Enthusiast
    spanyo's Avatar
    Joined: Jul 2008 Posts: 135
    I love having the amount of shares I have. I want to buy more. I want the number of outstanding shares to go down because of a buyback. I don't like the idea of an RS, but that doesn't necessarily mean that voting in favor of it would be a bad idea. But because of the new NASDAQ delisting moratorium I think the vote on an RS should be delayed until after February. (Who knows?...the moratorium may even be extended if things don't start to turn around by then.)

    If the price is not better by then, I would be willing to consider voting to give SIRI the OPTION to do the RS. It would give them the power to extend the 180 days until 360. By then we should be close to being a profitable company. I am fairly confident that SIRI would not execute the the RS until the last possible moment...December 2009...if at all. All 2009 debt will be paid or deferred...well after interoperable radios are out and likely in new cars.

    It will be hard for shorts to kill the new stock price if profit is right around the corner from the RS. It didn't take Google long to go over $100 when they were making profits.

    Now if SIRI is not about to make a profit at the end of 2009, I would be willing to be delisted and go over the counter. What are the downsides to this? I would think it might be harder to short it while off the nasdaq.

    I will take an RS over bankruptcy all day. 200 shares at 1.00 in a company that IS going to be profitable is a lot better than 10,000 shares worth .0001 in a company that has just wiped you out and is going to start fresh and still make a profit.

    Call me a kool aid drinking fool, but at least Mel hasn't taken any more ugly financing deals right now to appease impatient investors. (Yes this debacle has tested even the most patient.) So I figure that if my yes vote will give Mel the time and confidence to do what is best for us, then I will certainly consider it. If a no vote is seen as a vote of no confidence, then it may set us up for an ugly hostile takeover.

    When you tell someone to F off, they are much more likely to do the same to you.

    Let's just hope SIRI has the wisdom to take this vote off the table for now...unless they can't put it up for a vote again before they would need to get the NASDAQ extension. Anyone know if they can put it up for a vote anytime?
    Last edited by spanyo; 10-19-2008 at 10:38 PM.

  11. Ad Fairy Senior Member
Page 1 of 3 123 LastLast

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •