Freedom

[homer985]

Relmore, remember that Liberty gets 40% of the common regardless of how many shares are out. If Sirius dilutes by 1BB shares at a pps of $0.80 in order to raise $800MM -- not only does Liberty still get their preferred shares... but the conversion total will go up too.

At the current 3.86BB outstanding share total, the full dilution amount is about 6.45BB; but if Sirius adds an additional 1BB shares to raise capital, that will take the current outstanding total to 4.86BB -- and the fully diluted total to 8.1BB shares. That 1BB share increase to raise capital to buyback the Liberty debt -- will in effect -- increase the fully diluted total by 1.67BB shares.

I fail to see the benefit of this. And I don't think that Brandon was trying to say this - IMHO, he really thinks that if Sirius closes the investment agreement and phase II, that Sirius will get the preferred shares back - which would eliminate the 2.5B shares that Liberty gets. The "net effect" is by Sirius issuing 1BB to buyback the debt, then getting 2.5BB back -- thus the "net effect" saves the shareholders 1.5BB shares of dilution.

However, since Liberty doesn't have to return the shares and is not obligated to sell them back to Sirius... any share issuance will only increase the amount the Liberty gets in the end.



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[sl62]

Gentlemen...

Pardon me..but what somewhat irks me about all this, is the PURE and UTTER conjecture over something that is currently air and letters. Somehow a living, breathing model and concept has been created of nothing that is or might ever even be real. I can accept that people like to hypothesize and suppose the future, but this one has gone too far IMVHO. Of course we know the 1B shares will be approved, as will the other proxy items. But in no way shape or form is it clear how or when those shares might be used. The full extent of the current 8B authorization has not even yet been realized and this mountainous query about the new 1B (not even yet approved) is in heated debate and treated like they exist right now and are going up for sale. I just don't understand the time put into this right here. Further, to think Mel and Co. are intent (or even capable) on buying back the Liberty preferreds is ludicrous..or that Malone is even interested in such a thing. They are his and he is not obigated to do anything more than what he wants with them. And we sure as hell know there are no other deals in the offing that would negate this one only to trip consolation fees. Now wouldn't that be the shocker of the history of the world. Knowing what most of us know after going through this deal, it couldn't be more clear that this new relationship is much more than "a bailout". At very least, it piqued a genuine business interest in Maffei, which then was translated to Malone about "what can happen in the future." And to say the least, Malone knows staying invloved in SIRI, also accomplishes keepng his buddy Charlie E. frustrated and at bay where their two businesses compete is concerned. For me, I called this one a done deal when phase 2 hot the wires, no questons asked. Mr. Karmazin couldn't have found a better situation in which to find himself (when it comes to averting the BK situation he faced), nor a better partner that positions both entities for future possibilities. Why in the world people are fixated on this other stuff is beyond me. But maybe not that I'm even supposed to figure it out lol...I also find it interesting that out of the recently released Proxy contents, a virtual mountain has been made out of 1B extra shares that don't even currently exist...and no reporter or writer has even bothered to focus on the best news in the document: that the company is intending on extending its rev authorization date frm Dec '09 to June '10, and that the two new Liberty board seats will be ratified..thus making "the deal" even more real and in a sense that much more integral to a brighter big picture. I don't know, maybe it's just me bit thought I'd pass on my thoughts. Peace all.

[cos1000]

Gentlemen...

Further, to think Mel and Co. are intent (or even capable) on buying back the Liberty preferreds is ludicrous..or that Malone is even interested in such a thing. They are his and he is not obigated to do anything more than what he wants with them. Peace all.

I agree with a lot of what you said, and mostly agree with the statement above..... I think though that after the release of a Prelim. Proxy that is natural to try and understand why the extra 1B shares are being requested. I don't think it has anything to do with the Malone partnership or even their loans. I know Mel wants to get rid of the notes I described above, because having to loan those shares, that are not include in GAAP Metrics, but we know are keeping the SP down and in turn the Company's Market Cap, kills him and for that matter us. Getting them out of the SI would do wonders to fend off a take down after a reverse, especially if it occurs after the Q1, 2010... when most things will be better operationally....

[relmor2003]

I appreciate the feedback Homer, I really do. I do realize that the 40% stake is worth 40% at the time of conversion, regardless of how many shares are out there. Im going to also assume Malone is behind this move, as his voice is obviously beyond important to Sirius's future.(According to them, and Sirius as well(board seats, largest stockholder, etc..). This is all obvious. Ok....
I think we all agree on these points.
But if you read Brandons article word for word, he is only saying that in effect, selling shares(pure conjecture of course) at a price we could never have obtained without the Liberty loan, in effects reduces the cost of the loan in the first place. The dilution, mathematically added to the cost of the loan, is more than offset by a stock price sale of lets just say .50 cents. They basically sold the company for a loan. Hence, they received NOTHING in return(almost nothing anyway, in comparision of real value). They basically received the ability to once again resume selling shares at a value at least CLOSE to fair value. At least within 100 percent of fair value.Not bad, considering the 800% gain for the bk level(where they were headed THEORTICALLY). You cant sell shares to investors when your bk for .50 cents a share. So in essance, and I believe this really was his point, the Malone stake of 40% of the common wasnt a total ripoff, as first seen. In fact, in the end, SiriusXM has a better than 50 50 chance right now in my opinion, reading the deal as this....
Malone receives 4 billion shares and SiriusXM received 500 million dollars.
Of course Malone doesnt actually have these shares, so you could really read it as:
SiriusXM gives away 4 billion shares for 500 million dollars. (Yes, and one owner has a lot of them, probably a positive, as he hasnt converted yet, and when he does probably wouldnt be adding them to the float) The actual number of shares Malone now receives goes up now when they decide to convert of course.
Sounds a lot better than they sell 40% of the company for a loan, now doesnt it.
Or....
SiriusXM issues 4 billion shares for 550 million dollars(Sorry, I was saying 500).
Thats around .13 cents a share. So they diluted bk away. As we all know. But stil sounds a lot better than selling 40% for a loan.

[JohnnyIrishXM]

cos: There is in fact an ignore button. Click on the users name. That opens up the user interface. There are three bars, seperated a bit. The first one is Gray and has USER CP on it. That is not the right bar. The next one is BLACK and starts with SEND MESSAGE. This is the right bar. Right next to send message is USER LISTS. Click on that, and 3 options will drop down. The bottom one is Add to Ignore List. Click that and you are done.

Bassmaster: Regardless of right or wrong, this has been dragged out way to far. Tyler is not directly bashing Brandon, and Brandon is not directly bashing Tyler. (And no, I do not consider "Lets see what Tyler writes" a bash.) You are the only one that continues to drag this thread out. Lets put an end to it.

Newman,sorry have to disagree,this thread was created by tyler and hence Sirius Buzz to set the record straight and IMHO anyone can post anything they want for as long as they want,it helps in the long run i believe..

[JohnnyIrishXM]

Yes, but read the article again , I think he said "in effect". He was basically saying Malone caused the stock price to rebound, allowing a higher sell price for future dilution. Therefore it takes much fewer shares now then then to buy debt. I think he knows those shares are here to stay. Unless in a post response he said differently, but in that article he said "in effect", not literally. Similar thinking to what I was talking about in my post above, just worded differently, but same concept. Yes yes, those shares are 100 percent Libertys period, no one is debating that I hope. I HOPE.

No Relmor,Brandon's direct quote in a post is"they can before Dec 31 2009 terminate the Liberty deal by paying off the loan and have prefferred shares returned,I stand by my article"

[JohnnyIrishXM]

Well..... In fact there is a way to "Erase" shares that are already out there.... just no way to erase the Liberty shares.

The "Lent Shares" on the Ugly Deal are "Out There" and can be recalled upon the repayment of All of the the XM 7%, Convertible Notes, due in 2014. There is only a 1% penalty I think because I believe they have to be paid at 101% if paid early. If any "Discount" is available in paying off Debt with these "added 1B shares in dilution" as asked for in the proxy. It would be if these additional shares are used to pay off these Notes, and in fact, they would get a 25% discount in removing these shares from the market.

They would also remove what I believe is the major SI or "Hedged" interest in the Equity at this time. My suggestion would be that they R/S say 1 / 25 around the same time. That means they could use the addition 1B shares, after split 40B, worth lets say at .50(for simple math) / sh, a value of $500M, to pay off the $553M (somewhat less), and they could then "erase" the 263M shares, (10.5M after a split) from the Market place.

So in essence they would recieve a 25% Equity Discount by reversing the dilution created at the time of the Merger and the "Ugly Deal".

Isn't that what got the stock price to where it is in the first place??



Oh, and Thanks Newman for the instructions and I will be using it....

Cos,you are absolutly correct,those are the Loans i want paid off and shares returned,hoping they do that with further dilution,it is worth it then..
said this very same thing a month ago and some people thought i was on the pipe..With Liberty not converting prefferred yet they are helping stock price.

[JohnnyIrishXM]

When is dilution not dilutive to shareholders? Quite possibly when it involves Sirius XM Radio (SIRI)! I never thought I'd state this, but dilution of Sirius XM shares may actually be a good thing for shareholders. I realize at this point of the article, I've probably lost half my readers. For the ones that stuck around to see what hair tonic I'm selling today, I'll continue.

Sirius XM investors recently underwent a 40% share dilution due to a last minute deal with Liberty Media (LINTA). What I've learned of John Malone is that he is not the corporate raider that some think he is. The recent Sirius XM filing states that:

" Liberty Media Corporation has informed us that, at this time, it does not intend to exercise its rights to appoint additional members to our board of directors."

At the time of the deal, Sirius XM stock had been pummeled down to just a nickel, making any equity offering worthless at a time when the company was under siege by short sellers and bondholders. The Liberty deal itself, however, was never set in stone. The SEC filing at the time makes clear that:

If, prior to December 31, 2009, we elect to terminate the Investment Agreement (as defined below), the lenders under the Sirius Credit Agreement may require prompt repayment at 105% of face amount. (source)

If Sirius XM was to issue only an additional 1 billion shares of stock in order to reverse the Liberty deal, it would have the net effect of removing the 2,586,976,762 shares that Liberty's preferred stock represents. The total number of fully diluted outstanding shares would thus be REDUCED by more than 1.5 billion shares, which of course benefits Sirius XM shareholders.Skeptics have pointed to the Liberty deal as only a reprieve of sorts, citing an increased interest rate over the former bonds which were repaid. Reversing the Liberty deal through such an equity offering would reduce Sirius XM's debt load simultaneously.
Position: Long SIRI

Here is Brandon's article from SA,read it Relmor,i've taken the liberty of putting it in bold for all to see his intent..He complains about a fake BK story taking down the stock the other day,well this is just as dangerous the other way..how many people will read this and make a rash decision based on this false assumption...

[cos1000]

Cos,you are absolutly correct,those are the Loans i want paid off and shares returned,hoping they do that with further dilution,it is worth it then..
said this very same thing a month ago and some people thought i was on the pipe..With Liberty not converting prefferred yet they are helping stock price.

Johnny...., I am glad you agree with my take but when we had our discussion about a pipe... this was what you said:


Originally Posted by JohnnyIrishXM
First off.liberty doen't have 40%of shares until converted,as for the other 9.9%,they already bought them with 530mil investment of debt..
My theory is when the stock gets closer to $1 sp Sirius will issue shares for that debt equal to 9.9% to liberty.then try to get other debt holders to take shares and when all 8bil shares are issued the R/S happens,probably
1-5 or 1-10 spread.Depending on stock price,but definetely before Dec 09 Jmho.


That is not you saying the very same thing as I posted above.... Although the 530 mil in loans given by Liberty are around the same price raised through the sale of the XM 7%, Notes, with lent shares of 185 for the hedge, and another 77 or so for shorting to other underwriters.... You were not then saying what I am saying now.....at least not as I read it....

[JohnnyIrishXM]

Johnny...., I am glad you agree with my take but when we had our discussion about a pipe... this was what you said:


Originally Posted by JohnnyIrishXM
First off.liberty doen't have 40%of shares until converted,as for the other 9.9%,they already bought them with 530mil investment of debt..
My theory is when the stock gets closer to $1 sp Sirius will issue shares for that debt equal to 9.9% to liberty.then try to get other debt holders to take shares and when all 8bil shares are issued the R/S happens,probably
1-5 or 1-10 spread.Depending on stock price,but definetely before Dec 09 Jmho.


That is not you saying the very same thing as I posted above.... Although the 530 mil in loans given by Liberty are around the same price raised through the sale of the XM 7%, Notes, with lent shares of 185 for the hedge, and another 77 or so for shorting to other underwriters.... You were not then saying what I am saying now.....at least not as I read it....

no it wasn't mentioned specificly,but that is what i was referencing,in my head,but obviously the hedgers want cash not shares..didn't expect to get another Billion shares authorized tho,so selling for cash and paying off is hopefully on the table...