GM and Chrysler To Get Billions More
Anyone invested in satellite radio knows how important OEM subscribers are to the subscriber count, and in theory, the bottom line. The OEM channel offers more exposure for SDARS than any other outlet. Now, the two auto manufacturers that have the most lucrative OEM contracts with Sirius XM are about to get yet another bailout as the race to restructure their business.
The initial restructuring plans of both GM and Chrysler were rejected by the government. The companies have tried to maintain a status quo in means and methods of business. For their part, the government at least was able to recognize that the status quo would not work. Now, with a $5 Billion dollar carrot hanging out there, perhaps new restructuring plans will come to fruition.
Whether the sweeping changes in the OEM landscape that some expect will have a dramatic impact on SDARS is yet to be seen, but certainly Sirius XM should be making contingency plans with all OEM partners at this point, as it appears that GM can not remain the biggest and restructure at the same time. This will leave a SDARS void for others to fill. Perhaps Ford, which has not taken government money will step up in a way that will keep the SDARS installs at a level where they make sense.
Position – Long Sirius XM, No Position OEM’s
who knows what this company thinks- whether they get their own bail out, or fall out profit from the car companies- they would still screw it up- listen up
-here for reasons unknown the stock slides upward quite nicely in the mid to high fifties (cents)-what happens- the company issues a stockholder meeting date the end of may wanting to increase shares and talk about r/s-(once again whether its june 2010 or dec 2009 for r/s )-it just puts a bad taste in investors mouths-
so what happens( besides some profit taking- some im sure by Liberty)-the stock falls as low as 39 today-
this whole thing is so bizarre-i wouldnt put it past the company if they were somehow shorting themselves- they obviously want this r/s and obviously mel buying a bunch at 1.25 doesnt mean very much to him-now the guy isnt the youngest of people agewise.- with a march to r/s without a buyout- he would not see 1.25 before he retires or leaves this planet
Since the news that GM is going to be idle for 9 weeks (thats 2.25 months!!!)and hearing(again on “terra” radio” that the suppliers (read SiriusXM)are going to take a big hit.
Also heard that GM isn’t going to take the money straight out and very may go BK makes the above article kinda moot.
Mel,
Just go away and let someone who is not totally eaten up with terra radio have the helm.