Now that Sirius XM has laid out its cards on the table, I’d like to offer my view. I’m surprised at all the surprise and negativity from these other analysts. I mean, they have to be kidding, right?

On the reverse split issue, allow me to paint myself into a corner and applaud the company. It’s about time they got proactive in defending the stock price! This should have been done years ago. One of the biggest problems for Sirius XM over the past several years is that it has had far too many shares outstanding. Such a large number of shares combined with a sub 5.00 stock price has made manipulation too easy. The number of outstanding shares alone validates its reversal.

Have you seen the stock price lately? Dilution has been factored into it already. Several analyst reports that I have read this quarter have planned on it. They may have expected it in February, but what’s the difference at this point? So go ahead, trade the 35 cent shares for debt, then do a 50 for 1 reverse split. As a shareholder, I’d rather see the company trying to protect my investment rather than sit back and watch it evaporate further.

On the issue of the debt for shares “surprise,” I am just as excited about this as I am a reverse split. I thought Wall Street analysts were supposed to be smart! I can easily recall Mel Karmazin’s recent statements, that Sirius XM would be very close to being in a position in February, to pay off its debt with CASH ON HAND. My thinking is that the 30 million dollars raised will make that Feb 2009 debt retirement completely plausible. This is the single best sign of the future of Sirius XM that I have seen in many years.

The markets want visibility and it plans up to 18 months ahead. The market right now cannot see past February when it comes to Satellite radio. Many analysts have speculated about a potential restructuring at that time that could wipe out shareholders. Up until now, the company has been silent. These signs are the first real indication of its intentions to avoid bankruptcy and to reduce its debt. This is not just talk. Who, for instance, would accept 30 million dollars in common stock in exchange for repayable debt if bankruptcy were even a remote possibility? NO ONE!

The only reason to enter into such a deal is the belief that the equity has more value than not only the bond interest, but its principle. That is good news, no matter how you look at it, for shareholders.

Position: Long SIRI