Sirius XM To Avoid Chapter 11
In a turn of events worthy of a Hollywood movie script, the New York Post is reporting that “John Malone’s Liberty Media is offering Sirius XM a bridge loan of several hundred million dollars to help pay off debt that matures Tuesday.” The article also mentions that Liberty and Sirius XM are working together on a plan to deal with Sirius XM’s other debt obligations due in May and December.
It appears that Sirius XM has in fact accepted the offer as the following news had come across the Dow Jones Newswires just hours earlier:
S&P Removes Sirius XM Rtgs From CreditWatch Neg
Last update: 2/13/2009 4:31:38 PM
(MORE TO FOLLOW) Dow Jones Newswires (201-938-5400)
February 13, 2009 16:31 ET (21:31 GMT)
With literally hundreds of news agencies reporting that Sirius was heading for a Chapter 11 filing as early as Tuesday, it would appear that the bondholders were given notice of the events that were going on behind closed doors at Sirius XM headquarters.
Taking a step back to review the bigger picture, this should generate a lot of excitement on Wall Street. With credit markets making it hard for struggling companies to survive in the current environment, news of such a bridge loan warrants center stage as other companies may now look to the lead provided by Mel Karmazin and John Malone.
This could turn out to be a SIRI investors best case scenario as the news had broken after 7 p.m. yesterday. Facing a three day weekend, most traders had left for the weekend yet the stock which had risen nearly 42% during the regular market hours on Friday, rose an additional 23% as the news was breaking. With all of the outstanding debt issues currently being addressed, Tuesday trading may bring new life to the struggling equity. The nagging debt has held SIRI shares down since the completion of the successful merger of the two U.S. satellite radio providers. With the company’s debt issues removed, SIRI investors who have held their shares may finally be rewarded.
Position: Long Sirius XM
I always felt there was enough positive in SIRIXM that the shareholders would not get wiped out, even if they filed Chapter 11. But I never thought that we would get through without any further dilution. To good to be true, but it would be nice.
If they work out the rest of 2009 debt to the markets satisfaction, I could see the stock in the 75 cent range shortly thereafter. Probably will take a few more months if I am reading the article correctly.
A couple of positives I heard over the weekend:
Close to $3B of junk bonds were sold in the past week. 3 times the amount for the prior week. I heard that on Bloomberg.
Also, I heard on CNBC that we are currently manufacturing 9.5 million cars a year. However, we scrap 12.5M cars per year. And the price of a used car has gone up about 8 percent. Seems that there is pressure building in the new car market.
If we can get through this without further dilution, we got a shot.
Good luck longs.
I’m a bit perplexed to not be able and find any of the links to Jim Cramer’s comments last week about SIRI common stock being worthless and NOT COMING BACK ??!!
Has anyone information as to what happened to all this commentary ?
Somebody knows some powerful people here if they were able to get his commentary completely pulled as if it was never said. Cramer may have been kidnapped, put in a potato sack and thrown over a bridge and tape destroyed.
Perhaps James J. Cramer has decided it is time to be more judicious in his reporting and to tighten up editorial control of content distributed both on TV and at his website?
I would hope that individual reporters at the Wall Street Journal, the New York Times, the Washington Post, Reuters, Forbes, CNN etc can appreciate the very personal implications their erroneous reporting has on the lives of shareholders and their families, especially in these difficult economic times!
That is all I wish to say.
Well said, Roadkill…………….
They should all heed your words, as they ring true for us all. We are all interrelated today and self fulfillment at the expense of others only comes full circle eventually……………!
I went to bed last night dreaming of $5.00 a share in 3 or 4 years and wondering how I will be able to stop myself from selling along the way……….
I woke up this morning fearful of another setup.
All you longs out there remember those warm feelings when we first heard about the merger being passed????????
Well here we are again……….I was hoping we’d get through this on our own with our cash and on our terms. That’s great that Liberty could be saving us, but it’s not just because they like us. It’s going to come at a BIG cost.
Will we wake up Tuesday diluted to 8 Billion shares? Reverse split? Anything is better than BK but I’m still scared!
Did anyone see what DONNY DOUCHBAG had to say on power lunch this week?
link below…….
http://video.msn.com/?mkt=en-u.....p;tab=s216
Donny Douchebag can’t see the forest through the trees. This concept will evolve over time – they own the national spectrum and they can do whatever they want with it.
I also do not want to get too excited or really believe this is a done deal with Liberty Media. I also agree that Malone must be getting something in return if Sirius will still own control and shareholders will survive.
I think it’s a pipe dream to think 1.00 or 2.00. Let’s stave off bankruptcy and hope for .35 – .40 cents right now on a restructuring deal.
I’m just wondering how Hartlieb and his crew are spinning this impending good news into “guaranteed” disaster. Any thoughts?
no news on their site now for…………………………………………………………………………………………………………….a long time !
Maybe Donny is on the take from Dish and that Fart-Faced-Ergen………………..
Hartleib needs to take a hike, that clown might have possibley cost us 6 months on the merger! Is anyone in shock about the lack of articles about this story or company? On Friday the WSJ and other crap pubs were printing the same bk story every hour on the hour! Now with good stuff in the works….nothing! I had all my eggs in one basket like many others…so if we do make it out alive…I will never get so involved in a company ever again! I look for a nice pop on tuesday…taking off work so I can move some shares! I am going to play the swings…god knows its not over..so if you can make a dime on this company and get back in do it! Do not be afraid to sell on the run ups! It will only take one horseshit story to cut the legs out of a run. I am pumped for tuesday….the volume is going to be nuts! Good luck all!
Long Siri, long Steelers O line!
short WSJ, and all other haters!
Renegotiate OR Remove These “SHOWS”
1-OPRAH
2-MARTHA
3-O&A (CBS VERSION-sucks + useless as teets on a bull)
4-ALL Foreign language channels.. (You are in America, M-effer’s)
5-LOCAL? Traffic and Wthr? (Bandwidth user/loser)
6-Foxxhole (SUCKS.. see #5)
7-Stern’s contract: FIVE day’s a week dude (personal pet-peeve)
8- Eff BASEBALL… Yawn + BIG $$ + Roids = S.H.I.T product
Big money people.. numbers 1,2,and 6. These people are NOT broadcasters and work THIRTY MINUTES a WEEK..
-Good Job Mel. In the years to come the *FULL SPECTRUM of BANDWIDTH* will be seen and will prove the MERGER was the right decision. Either XM or Sirius was going to fall, maybe both. Thanks also to Liberty Media!!!
These are the “lean” years with many GROWING pains, and a HORRIBLE economy. Hang in there people… It will get much better. Personally I am going to buy $250 worth of this stock for pennies/share.
PS. Hartleib is an A$$hol*
I think the first question that must be answered is, is the Post story true? There are not any other sources reporting the bridge-loan and that could be because the Post has a connection that they trust and feel comfortable with reporting on. It could also be BS but I don’t think that’s the case. Needless to say, we won’t know until Tues. and who knows what may have happened since Fri. The one thing that we all know is that the credit rating improved, which in itself should drive the stock a dime or so. Any other “good” news will just supplement that. If the Post story is BS, look for minimal impact either way unless a BK is announced. We shall see.
One other thought is that the news is being held tightly by Sirius / Liberty so that they/affiliates can buy some shares for less on Tues. a.m. before the official announcement.
New details coming out now from the Financial Times….
http://www.ft.com/cms/s/0/4a05.....ck_check=1
Creditors getting into the game…pressure is on for Mel to take the deal or risk getting fired if BK filed. This just gets more and more interesting.
From WSJ and CNET:
Feb 16 (Reuters) – The following were the top stories in The Wall Street Journal on Monday. Reuters has not verified these stories and does not vouch for their accuracy.
* A group of Sirius XM Radio Inc (SIRI.O: Quote, Profile, Research) creditors says it is prepared to seek the ouster of CEO Mel Karmazin and other senior executives if the company files for bankruptcy.
The Saga summarized for tomorrow:
The deadline arrives for Sirius Satellite Radio to pay off $175 million of notes held by Dish Network CEO Charlie Ergun. Barrington Research analyst James Goss doesn’t think Sirius will file for bankruptcy. Meanwhile, John Malone’s Liberty Media has emerged as a possible white knight.
Do you buy what you can in the AM in a last ditch effort to dollar cost average as low as possible, risking even more capital?
Or just hunker down with what you have already, and pray.
Either way, adrenaline and palpitations will be the order of the day it seems!!!
A decision may come today, and if so, no one will have time to react before market opens.
It may be time to get down and pray.
I found this on standard and poor’s website :
Sirius XM Radio Inc. Debt Ratings Affirmed; Subsidiaries’ Debt Ratings Raised
http://www2.standardandpoors.c.....0,0,0.html
Excellent !!
Thanks, I think it’s looking Better for Us !!
Let’s friggin Roll !!