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
fianly, some good news,
This is the best post you’ve ever written, Brandon. You are cool in my book, once again.
nice, people were actualy trying to spin that s&p update as bad, long live sirius xm!!!! long live mel!!! long live the shareholders!!!! long live brandon!!!!!
CNBC also reported this news, on their ticker, late Friday evening.
Thanks Brandon….this is truly the “best case scenario” for the shareholders.
If all this happens as reported, I hope that all those who were calling for Mel’s head relieve that this was exactly the reason that we needed someone with his experience and connections. 99% of the other CEO’s out there probably couldn’t pull this off.
Daniel
That is a very great point! And don’t forget, Karmazin has a 5-yr plan to make SiriusXM a powerhouse of content and delivery over many platforms.
When did Mel mention content delivery over many platforms? I am not doubting… I am just very curious. The quicker they drop “satellite radio” from their company name the better!
Google “satellite radio is dead.” The genius prophet who thinks he can see into the future (Mike Elgan) is going to be harassed to no end once Sirius XM DOESN’T die. I personally can’t wait to bother him and I invite others to do the same.
“99% of the other CEO’s out there probably couldn’t pull this off.”
Ain’t that the truth!
Now, if we can keep that idiot Howard Stern from giving listeners the impression that he will probably leave in two years and start at least talking about signing on for another term the stock might start to return to it’s glory days. His talk of leaving does NO GOOD for the stock price.
Ed
Ed
I think that was part of the strategy. To get everyone to think worst case scenerio. Personally, I think Howard will soon announce on his show that he’s decided to stay on for a few more years and probably re-work his contract at the same time.
Good afernoon – Saw your latest Sirius article which was posted on Yahoo message board, then subsequently altered to a negative twist a few minutes later by some slim. Less than an hour a ago, another message was posted stating that Sirius, unable to meet its Tues. note had just declared BK — supposedly sourced from Nick Miroff, a Washington Post staff writer…. Please e-mail with comment, thanks
Karmazin is an idiot and a****le. This idiots bad decision to merging XM had brought all these issues. Otherwise situation would have been different. Xm would have gone as it was in moribund stage. Sirius could enjoy the day now. Or atleast XM deal should have been renegotiated prior to merger. All these things had gotten us into this mess. I own sirius stock for the last 6 years and it is a total loss of several hundered thousands if sirius doesn’t move up. Hope good sense prevails at Karmazin to shareholders interest would be protected instead of personal egos. Once this troble is managed, Sirius Xm is going to rock, $2 Billion revenue company is not a dead cat. It’s does need to reorganize the business a little bit and adopt to new technologies like Ipod and others so it doesn’t soley rely on Cars only.
Despite this good news, I still think SIRI might file some sort of bankruptcy (i.e., XM) that wouldn’t wipe out the shareholders. If that happens, they’ll have a hell of a time explaining the Post article, wouldn’t they?
don’t be to sure of that Malone’s comp is the largest tv satellite co in the country i think he’ll bail mel out if they have paid the feb debt off which i think it has happend they have 3 months to figure everything out restructure sirius xm and find out what programs they don’t need like oprah, martha stewart, etc…
Hi- I too hold stock in Sirius and have since 2003. Anyway, went to Washington Post.com and did not see any headline to this effect…
my balls have swollen to twice their size over this news!!!!
That’s funny, the majority of us have something else swell. But I’m sure thre would be some woman who might like that.
LOL, hope it’s really true Monday and if so, want to buy alot more shares early.
god i hope its a good day i got laid off friday and holding 10k shares.long live teusday!!
Good luck Michael! Hope SIRI gets to over a buck soon for your sake!
thanks buddy a doller and i would be even.learned about average down thingy from you guys and siriusbuzz radio.If this stock was a drug,i must be artie lang
How high can it really go? It is not like they are getting bought out and a lot of the news has already been priced into it getting capital infusion. I wish everyone the best because we have all suffered with this stock and I averaged down on Thursday and sold all of my shares late Friday. This just gives them more time, but it is still uncertain for the future. Good luck and I hope for all of you holding it goes up a ton. It has been stressful, interesting, and fun while it lasted. Good luck!
If this goes through, don’t watch it rise without getting in again. You will have your chances on pullbacks.
I actually sold out at .09 early friday, then bought back higher @ .0996 with 75% of my shares after haearing the news on the Dec converts and waiting for a pullback from .12. Still a little cautious I still didn’t want to add back all my shares chasing it up, but will commit those shares back plus more if I have a good chance on Tues “if this news is legit”
So I don’t want to say I regret anything yet, because this news has not been confirmed, but at least I’m in with most of my shares.
OHHHH!!! I am so glad I bought back in a .07. I initially dropped out at .09 and lost a few hundred but bought back in for some unknown reason!!!!!!!!!!!
Michael-
You’re welcome. All of us are in danger of getting laid off. This economy sucks!
Guy, This is gr8 news about SIRI, I trusy Mel, he is a great CEO and he has lot of connections. By the way Michael, i work for U.S Customs and we are hiring like crazy at the border. Look for careers as Border Patrol Agent..Its secure and Government job and it pays very good mid-career. Good Luck to you.
i would in a minute but my family lives is philadelphia.im a union cabinetmaker
now, after this news tuesday(assuming debt issue resolved which i still think May and part of dec will be outstanding)then follow it in a few days with maybe a surprise 4q report?
On tuesday, for all of those holding. It may be smart to take some off the table. Do not forget how heavily this stock gets shorted or how goldman sachs or someone else can downgrade it, and it plummets. Especially, if you averaged down under 9 cents a share, that would be an amazing gain off of that last amount invested in which you wouldnt be able to get from any other investment of that money.
This is great news, after all the pain we have gone through since the merger it seems almost to good to be true. I got so used to everything being negative about siriusxm it’s strange to see something positive at this multitude happen. I finally feel like this company is turning the corner and it will shine in the future. Cheers everyone, to better sleep everynight!
WOW – with this cash injection basically taking DISH out of the picture (at least for now) and leaving Mel in control PLUS the Malone’s likely backing of future debt to support his current investment, Sirius should become the powerhouse Mel has painted. A company going to the brink of bankruptcy and down to the wire essentially invokes a “near death” experience, which tends to change the lives of the impacted entity. I don’t see an exception here – Sirius XM should emerge from this with a new outlook on life. All of those that jumped ship and sold should get back on board as quickly as possible so that they don’t get left out completely. I see this stock topping $1 within a couple of weeks if that and then back up to near $3 within a year. But that’s just me – we shall see.
Is this any further news than what we already heard through the post late friday ? I am excited, but still cautious.
“SIRI investors who have held their shares may finally be rewarded.”
Really? I’ve held and I need it to go UP about $3.30 to breakeven. My average cost is about $3.40!
I knew it was a good sign that my order for 8000 shares at 9 cents placed 2pm Friday never filled. If it had filled, that might have been a bad sign, but then I would now have a $1.40 average instead of $2.50. I too, like an a***ole have held SIRI (and XM) for ten years.
I want to find out why Etrade doesn’t allow for decimal trades like Scottrade. It has really hurt me making moves. Let’s say you could have put your order in for .091, it may have bought then. Market orders are too dangerous with all the manipulation, so most of us have been forcd to round penny orders and have not been able to buy or sell at times.
This is why I only trust a broker. I found me a good guy through Wachovia and he’s not too fond of my transaction in this company, but he understands why I’m doing it.
Schwab allows in the hundredths of a cent, at least (for example .0947).
I quit bothering with decimals a while ago….no one seems to take them. I just round it forward and take the best Etrade gives me.
I have a theory on the constant threat of bankruptcy, even though it may be very true. If you were a hedgefund of someone interested in convertible swap or shares for debt, you might be alot more interested if you could cut a deal with the shares as low as possible, like .05 cents. There are alot of very strategic moves going on between all parties, but I have to say that I think Mel will pull this off, save shareholders and this will cement his legacy.
Mel – close this deal and write a book !
I hope like mel stated that the Sirius dog will take a shyt on the the shorts leaving them with only bacon strips on their shorts.
saint valentines day short massacre with this article!
“It ain’t over until it’s over.”
But positive news non the less.
I was willing to hold to 0 on this one, now maybe we will see 10 eventually. Any predicitons for Mondays close?
For all those who bash Mel for merging the companies..had the FCC not been bastards about the whole deal and held it up….and had the credit crisis not come just in time to spoil our party, you would all be on your knees thanking Mel. OK…so he may not be the best at PR with the shareholders, but to imply that he was sabbotaging the shareholders is ludicrous. Mel did not sign Stern to his outrageous contract and has been focussed on growing the company while reducing costs. The merger was part of this larger picture and he did not care about you short term investors. This stock has been hurt so bad by the day trader expecting quick gains and beating down the management when they don’t get them because management is focussed on a long term picture.
Until I see a PR from SiriusXM, I am taking this theory/story with a grain of salt. If this is true, how ashamed are all those news wires and ANAlysts calling this company dead.
SXMI… I am right next to you and waiting for some type of official release from the company. All we are seeing is this unnamed source or that unnamed source.
I hope it is all true
vaporgold
If this is true, how big of a short covering will we see? There are currently over 275 million shares short, right?
Sirius Xm Radio Inc. $ 0.11
SIRI 0.03
Short Interest (Shares Short) 271,931,400
Days To Cover (Short Interest Ratio) 11.0
Short Percent of Float 7.86 %
Short Interest – Prior 219,626,600
Short % Increase / Decrease 23.82 %
Short Squeeze Ranking™ -84
% From 52-Wk High ($ 3.89 ) -3604.76 %
% From 52-Wk Low ($ 0.05 ) 50.48 %
% From 200-Day MA ($ 0.55 ) -423.81 %
% From 50-Day MA ($ 0.12 ) -14.29 %
Price % Change (52-Week) -97.60 %
Shares Float 3,460,000,000
Total Shares Outstanding 3,513,400,974
% Owned by Insiders 1.50 %
% Owned by Institutions 36.10 %
Market Cap. $ 368,555,762
Trading Volume – Today 263,495,557
Trading Volume – Average 24,670,600
Trading Volume – Today vs. Average 1068.05 %
Earnings Per Share -2.18
PE Ratio
Record Date 2009-FebA
Sector Services
Industry Broadcasting – Radio
Exchange NAS
Data Provided Without Warranty
http://www.shortsqueeze.com/?s.....t+Quote%99
“Clipp-ity clop…clipp-ity clop” — that’s the sound of Sylvestor Malone riding in on his white-knight horse crying, “Liberty!”.
’bout time something happened
Anyone that does not have their adrenaline pumping heavily on the Tues. open and subsequent days’ movement may not be heavily exposed – had this news not come along, anxiety and despair would be the predominant mindset as it has been. So, caution goes to the wind and let’s enjoy the high. There will be ups and downs to come, but if we hung in there until $.052 then I think we’ve earned the right to do that. I actually got hammered last year with this stock (bought at an avg. price of $.70 and sold at $.121 (20K sh), bought again a couple of weeks ago at $.143 and sold at $.080 (45K) and then bought at an avg. of $.092 and hold 35K sh. I, no WE, need this.
With all due respect… there are many of us that have been “hammered” by the stock a lot worse than that!
I believe that most shorts are investors in the converts and are there to protect their investment. I think you may see a short covering as converts are paid off.
I have and avg cost of about$2.50/$2.75 and have held on for dear life for about a year. I have told myself how stupid to put all of your eggs in one basket. But I liked the concept and still do. If I could just get half back it would be a miracle. Is that real investing or just plain stupid? I went from $200k+ to almost zero. Abraham Lincoln is no longer my hero. Go Liberty.
Yeah Kenneth. I’ve got about $160,000.00 into it. Mostly retirement funds. All in one basket as well. We know better but…… Got down to about $7000.00. I’ve had a lot of cold sweats in the middle of the night. Learned a GREAT lesson. Hopefully I can look back and smile!
A bunch of us are in the same boat. I have approx $ 140K in this stock too. Almost went to zero…..who knows it still may. I hope not. I will be holding for now. Good Luck to all.
Like Cramer said when he interviewed Mel…. He said sophisticated investors buy the converts and short the stock. DOES ANYONE HAVE A CLUE HOW MANY PENNIES ON THE DOLLAR ERGEN BOUGHT SIRIUS DEBT? VERY CURIOUS. Brandon do you know??
Ergen could turn around and outbid Malone so not to risk Sirius filing and his bonds worthless or more likely just losing the company to Liberty.
These guys have enormous EGO’s and do not like to lose and as important as $ is, the EGO may even distort their thinking and supercede all.
This is what we hope for !
Sure. I’ll play.
I believe Ergen picked up most of the debt at about a 20% discount. Here’s where it could get very interesting.
I think its safe to assume that as the original bondholders sold their bonds, that they would have covered their short positions.
What if, and I know everyone loves my “what if” scenarios, Ergen was shorting the stock expecting the company to default.
He may have made millions on the bonds, but if the stock price spikes in premarket he stands to lose a lot more than he has gained.
Brandon…. Keep going with your “what if’s” they bring fresh perspective to a tired story!
he could have been shorting it to bring the pps down so as to make it more difficult, if not impossible, for siri to convert their other bonds to equity, or to issue new stock to obtain funds.
SiriusXMInvestor,
I dont think it is as cut and dry as dreads post. Remember that number is as of the begining of Feb. Not now! and after a few days of 200M+ trades it is very hard to say. With the price below .10 why would shorts hang on? Insanity would be the only reason. Many I am sure got out in the .08 to .06 range. Anyway hers hoping i am wrong.
change 200M+ trades to 200M+ shares traded 🙂
Confirmation of this Bridge loan is the only thing we need to see a positive move in PPS. The loan still needs to be repaid by SiriXM in the time allowed in the loan. Positive 4th qtr numbers along with the possibility of APPL streaming SiriXM may bring in new needed revenue.” NICE”. Mel may mention this in his earnings call then……………. BAM!!
http://www.financialpost.com/m.....id=1281633
As part of an accord, El Segundo, California-based DirecTV could buy out existing shareholders and repay Sirius XM’s debts, said one of the people, who declined to be identified because the talks aren’t public.
that line from the article you posted brandon caught my eye… what’s your take? at what price do you think is reasonable for a buyout?
brandon, i think that’s an old article…is there something in the article you were using it to reference, because the DirecTV transaction mentioned in that article does not appear to be the same one as currently reported in the Post.
That iPod app is going to be huge. That’s the avenue that was needed to take off and now, with the necessary cash to move forward, Sirius XM is well positioned.
Maybe 2009 will not be so bad after all.
Long SIRIXM
-Jmix
-Austin
Glad to hear this !! I guess last night when I posted, but was not sure of the news I had found………….
Reply DRALAND says:
February 13, 2009 at 6:57 pm
just found this online at my brokerage house,
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)
Doesn’t this equate to an Credit Rating UPGRADE ??
………………it may have really meant SOMETHING ??
Way to go guys !!
Thanks for the update !!
I saw that on schwab and would that totally inconsistent with a chapter 11 filing….like the S&P had some information that the rest of us did not have.
did they upgrade merely because of the 172.5M December bond extension? or, did they have other information, too?
My concern is the senior debt purchases. To benefit the most over their arch nemisis, the debt purchase must be followed by a bankruptcy filing.
Is the hatred in their hearts so strong that they purchase senior debt and then purposefully drive the company into bankruptcy?
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.....8;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!!!