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Ok, here are my major questions and opinions about this whole thing:
1) Where the hell is Echostar getting the money to be buying all of this debt? The financial reports they file with the SEC say they have limited cash on hand (less than a billion).
2) According to Homer (and no one has ever been able to prove him wrong yet), the satellites have limited transmitting abilities and thus would be virtually useless to Echostar, which rules out the thought of Mel selling the sats.
3) After Clayton recruited Karmazin and worked with him for years, is he really going to turn around and stab him in the back? SIRI and SATS have had a working relationship for YEARS. I am not saying that the would not make a good combined force,but do they really want to force the BK to do that?
4) I do not see any reason that the FCC would block the aquisition, as long as they agreed to follow the mandates that Sirius agreed to. The FCC will not let the company kill off a combined 20+ million radios.
5) The more I think about this, the more I think that this is a purchase of convienience and opportunity. Echostar will definately get something out of this, but not the whole company. I think this is Echostar's way of initiating a significant interest in the company in order to expand their own business. Sirius BackSeat TV (with patented Sirius technology) offering 250+ channels of Dish TV.
6) If Echostar is pushing for BK, they will have to buy bank debt eventually to become the controlling body. If they have not yet started, it will be very expensive for them to do it now. It was assumed that the banks would simply extend the maturity date of the debt as opposed to force into default because it made sence. Now, they have an out and they can sell to Ergan. The problem is, the banks STILL lose money because Ergan is not going to buy for face value... he wants it at a discount. The banks are still better off extending, collecting interest, and cashing in next year once the company is FCF positive.
7) Again, WHERE IS ALL OF THIS MONEY COMING FROM?? Their 10q said they dont have a whole lot of cash on hand or available capital. So where is all of this money coming from? I Know they bought a lot at a significant discount, but they will have to buy a lot more in order to become controling entity, and they simply do not have that much cash.
I think we may hear more from SIRI, Mel, or Echostar next week to clear up the situation. According to one of the posters on the Yahoo boards, we have been needing to fill a gap down to 0.08 since it happened... maybe this is simply the rut to fill that gap before it takes off again?
Anyone's guess is good right now, because there is no clarity here.
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does the drop to .8 really have to happen? i mean just cause some dumbass's stop loss got triggered that means we have to go to 8 cent, i could not bear to see that, i cringe thinking about it GRRRRRRRRRRRRRRRRR
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That 8 cent trade for like 100 shares doesn't count..........
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and that post came from the duke, if u read his pryor predictions he is usually wrong about price movement.
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A reader named Chris from Somers Point, N.J. respond to The Wall Street Joournal's Martin Peers column,"=HEARD ON THE STREET: Sirius About Staying Aloft" which ran on Dow Jones Newswires on Thursday at 4:29 p.m. EST.
Mel should rework entertainment contracts and immediately go cash-flow positive. This stock could have tremendous upside buy only if it stays independent for now. Do whatever it takes to legally cover the debt and remain independent.
(TALK BACK comments may well be submitted by readers who have a financial interest in securities that are being discussed.)
(TALK BACK: We invite readers to send us comments on this or other financial news topics. Please email us at TalkbackAmericas@dowjones.com. Readers should include their full names, work or home addresses and telephone numbers for verification purposes. We reserve the right to edit and publish your comments along with your name; we reserve the right not to publish reader comments.)
Here's the original column
Mel Karmazin undoubtedly hasn't forgotten the four tumultuous years he spent shacked up at Viacom with Sumner Redstone. So it's a good bet the CEO of Sirius XM Radio
doesn't fancy the prospect of working for another strong-willed mogul: Charlie Ergen.
For that reason alone Mr. Karmazin is sure to spend the next 10 days searching high and low for $175 million he needs to pay off bonds held by Mr. Ergen's Echostar Technologies. Otherwise he faces the prospect of Echostar trying to muscle its way to at least partial control of Sirius.
Don't bet against Mr. Karmazin. Beneath the roughly $3.2 billion of debt now dragging the satellite radio company back to earth lies a decent business with around 19 million subscribers. Cost cuts flowing from last summer's merger of Sirius and XM should take the company nearer to profitability - although the recession will hardly help.
Sirius could prove attractive to companies like Verizon or AT&T, both of which have national wireless footprints that might dovetail with a satellite-radio service. Liberty Media could also be sniffing around.
Still, Sirius needs serious money. Leaving aside next week's bond maturity, the company has $350 million in bank debt due in May and another $400 million in bonds due in December. Without the means to deal with those maturities, paying off next week's bonds only buys a little time.
One thing is sure. Having sunk $2.7 million into Sirius stock just last August, Mr. Karmazin will be keen to avoid a Sirius bankruptcy filing. If he has to yield to Mr. Ergen to avoid that, he likely will. Then Wall Street can settle in for a new clash on the corporate airwaves.
(Martin Peers is deputy editor of the Heard on The Street column. He has been a reporter and editor at The Wall Street Journal since 1999, most recently as deputy media and technology editor. He can be reached at 212-416-2305 or by email at martin.peers@wsj.com)
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/nae/al?rnd...tSjGoMmw%3D%3D. You can use this link on the day this article is published and the following day.
8:22AM ET, Saturday, February 7, 2009
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points of interest
1. xm radios cant receive siri signal and vice versa. so siri cant sell the xm sats without loosing all of the xm subs.
2. 3Q siri had $320M in bank and owes $178M. 4Q was FCF of around $66M. so they can pay off the 1788M bonds due feb 17
3. Mel is 65 yrs old and this is last job after 40 yrs in radio. he does not want this to end in bankrupcy to ruin his career. he bot with his own accont somewhere around 5-6M shares at higher prices, i think 3M was around 5.25. that is real money no matter how much money he has.
4. May $300M is a loan that comes due. the money is owed to JP Morgan Chase and UBS. they most likely will extend the debt at a high interest. Vonage had the same problem and had their debt extended at a high interest. of course this assumes ECCO has not bot this debt.
5. where is ECCO getting the money cause if you look at their balence sheet it is cash poor. Well ECCO is the 38th wealthiest american and i think i read he is the 58th wealthiest person in the world.
so we sit back and wait 11 days
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http://www.investinginbonds.com/corp...usip=82966UAC7
sirius feb 15 bonds have jumped to 1.05, can any1 explain the significance of it, i hear it means the street is expecting mel to come up with the payment and its a really good sign.
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EchoStar (DISH) play, a move into mobile video
Posted Feb 8th 2009 6:46AM by Douglas McIntyre
Sirius XM (NASDAQ: SIRI) was showing early versions of mobile video for cars five years ago at the Consumer Electronics show. With it heavy debt load and questions about how large the market might be, the satellite radio company never took the step of offering it as a product.
The promise of mobile video may be behind that willingness of EchoStar (NASDAQ:DISH) to buy tens of million if not hundreds of millions of dollars of Sirius debt. The move could get EchoStar control of the satellite radio company. According to Reuters, "EchoStar chief Charlie Ergen's surprising interest in Sirius XM Radio Inc belies his ambition to liberate his satellite television service from the living room into cars and mobile devices."
EchoStar is taking a very big risk. First, it is putting money into the debt of a company which has never had an operating profit and which is experiencing slowing growth. Satellite radio is being hurt by competition from other consumer electronic products like multimedia phones.New car sales, it primary source of new subscribers, are falling sharply.
The second risk is that pushing video over the Sirius infrastructure may not work. The bandwidth from the satellite to the cars is very limited, closer to dial-up speeds than broadband, Sirius may not be able to "compress" the video files enough to get them though its system. In other words, the technology may not exist to put video on a system which was designed for audio transmission.
Other than the fact that it may not work, EchoStar's potential plans are brilliant.
Douglas A. McIntyre is an editor at 24/7 Wall St.
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Sworntofun,
Please post links when posting articles.....here is the link for that one.
http://www.bloggingstocks.com/2009/0...e-video/print/
That Douglas McIntyre guy has a bearish agenda and has a history of bashing SIRI with false statements about the company.
What does he mean it might not work?
It already does work. SIRI already offers Backseat TV.....
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Anybody care to share their predictions as to what kind of action we'll see this week? I have a strange feeling that it's going to be a good week. Keep in mind, this feeling is not based on any facts whatsoever.
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I think the start to this week is going to suck hard core. News around the stock is just going to keep driving it into the ground.
Think we'll see a run up toward earnings and toward debt day. My guess is we come out .18-.20 (probably optimistic) by the time the month is out.
Unless something else comes out of nowhere, in which case god knows.
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i think we are going to see immediate take off on monday.
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I'm actually hoping it falls to .11 on Monday and I will pick up more shares. We'll see what tomorrow brings...
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damnt hughes if u havnt gotten your shares that low already thats ur fault dont curse the stock lower!!!!! :O
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One down day won't hurt us if we end the week on a positive note...
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if it goes to 11 again its going to be early and for a split second so you better be ready, it could very well open round .18 cents again though :)
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my bedtime prayers...
1) that citi and bac & jp morgan chase are gonna start now lending a lot of money out for car lenders... using the 2nd half of that 700 billion;
2) that people are tired of driving their old junky salt ridden snow clogged jalopies and are ready for that brand new shiny car in the showroom, with that brand new shiny siriusxm radio which they're gonna renew after the free subscription cause they're gonna learn they can't live without it;
3) that car sales bottomed in january and we'll see slight improvement or the end of the decrease, in february
4) that that stimulus bill is gonna get out of conference committee before the end of the month and get passed
5) that unemployment bottomed in january and will either be less or the same
in feb;
just over 12 hours to the bell...
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Tripp...
So what do you think! are you gonna do it...If you put it at $10 whats the worst that could happen!
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Just set your limit order high enough, just in case of a reverse split. I have mine set at 15.00, and GTC, Every couple months it expires, and I just reactivate it.
Still won't stop the naked shorts, and the SEC is a joke, but who knows!!
Good luck this week everyone!!! Maybe we will get some good news. :)
