Liberty’s Greg Maffei Appears On CNBC
CNBC – Nice to have you here and have you come down to the floor. Let’s start off with Sirius, it’s been in the news. Yesterday, in fact, ready to go back to the FCC and why do you want to take control? And what would you do differently if, in fact, liberty does take de facto control of Sirius satellite radio?
Maffei – As you pointed out, this is only de facto control, which is only how you’re able to exercise the rights that you have. How we’re allowed to use those rights under the sec’s rule rules. We’re just going to go through a regulatory process to exercise the rights that we have.
CNBC – And, if you get those rights, is there something that you would do differently that’s currently being done?
Maffei – Well, we think Mel (Karmazin) and the team there have done a great job. Business has been performing well, so we’re very happy with all of that. Liberty makes its weight and thoughts known, but in general, we’re very serious.
CNBC – Something else that you’ve been enthused about is the $6 billion gain. The greatest investment probably of all time. You came in when the company was close to bankruptcy. Many people think that you’re going to pursue a Reverse Morris Trust basically a way to spin it off to shareholders in a tax-free manner. Is that the case and is all of this just posturing to agree to allow you to pursue?
Maffei – I’m not sure where we’re going with the investment. We’ve said there are two logical paths for us. One is to go in control, the other is to pursue a Reverse Morris Trust the way did with Direct TV and ultimately be with our shareholder’s hands. I can’t tell you which way we’re going to go. If i knew, I would tell you. We think Sirius is a great company. It has a lot of potential going forward. and we’re not in a rush to make any decisions.
CNBC – It’s also going to start spitting out a good amount of cash flow, correct?
Maffei – Absolutely. Satellite money has been spent, leverage is coming down, and, as it’s been noted before, a large NOL (Net Operating Loss) position. So it’s going to spew a lot of free cash.
CNBC – Now, there’s some speculation that you’d want to take your stake up to 80%? Is that the case?
Maffei – I think that’s highly unlikely. We tend not to want to pay top dollar for the last share. In addition, all of those NOL’s are going to be used by Sirius.
CNBC – Are you sick of being a manager? Rumor has it you are tired of that.. I don’t even know if it’s accurate.
Maffei – I can tell you it’s not.
CNBC – Would you want to get rid of Mel (Karmazin) if you took control?
Maffei – No. We want to keep Mel involved.
CNBC – Then why not just go along with whatever you want to do?
Maffei – You’ll have to ask Mel (Karmazin) that.
As you can tell, there is a lot of posturing happening. While a lot of cards are being shown, certainly Liberty could take any of several paths to get to where they want. The bottom line is that it is obvious that Liberty likes what they have in Sirius XM and is excited about the prospects of Sirius XM as a company.
I am not worried about SIRIUS as a company(cause its kicking a$$!), and I am not worried about what Liberty will do(cause i am confident it will all work out)….HOWEVER, i AM worried about this Euro Crisis and the weak jobs numbers today. Last summer we faced similar headwinds, and SIRI ended up dropping to $1.27 because of it. Not saying we are going back there this time, but i don’t like this at all. It seems like the Republicans smelled blood today. Boehner and company were practically salivating. Last summer they practically forced the US to default. God knows what they’ll do this summer leading into an election. It seems they LOVE that the economy is slowing again. Boehner was practically smiling today! I really have no faith in them doing ANYTHING that will help create jobs….so the next 6 months we are pretty much at the mercy of the macro economy. IMHO.
Just gotta wait it out.
Much more concerned about Liberty taking over and discovering that Mel has been playing funny shell games and three card monte with the subscriber and income numbers… Who cares about the euro crisis with regards to Sirius, LOL!
Nah John. Not worried about THAT at all. Lol. I guess everyone worries about different things. But Mel playing shell games with sub numbers is NOT one of my worries. Malone thinks Mel isdoing a great job, and so do i. I was more worried about how Liberty would treat current shareholders if they took us over. But now i am not.
Again, for me, its this Euro crisis and threat of a double dip recession that is most worrisome to me. Not because i dont think it will end someday…but that it would delay my ability to sell SIRI at my target price within my timeframe.
We all have our own time frame…and i was hoping to sell SIRI (which i bought at .99 cents) btwn $2.50 and $3.50
I could have sold last May at $2.40 and again this oast April at $2.40 but i didnt. I was hoping SIRI would at least reach $2.40 again by the end of this year….but now i am not so sure.
I am and just trying to figure out if liberty takes more than 50% control of Sirius,forget about the players or the RMT I only want to know will the ticker stay the same? Will Sirius
still be in business? Will the takeover include a premium for siri shareholders or will each siri shareholder get a certain amount of liberty shares based on the amount of Sirius shares they own?
With the power of liberty taking over Sirius they have to try to up the price of Sirius in the 3-4 range or do a split to get it on the nyse to get a better clientele
Someone please give all the siri longs something good to hope for!