So anyone here think Brandons article has NOTHING to do with not Holding .13 today?

[homer985]

Hi, OK need some help deciphering the wording of agreement.
It appears to me Liberty gets 12.5 mill preferred shares and with these several seats on board of directors.

If they convert the preferred to 40 percent common they agree not to acquire more then 49 percent for 3 years.

Do they keep those seats on BOD if they convert?

As long as they have 40%+ of the common, they can demand to have seats on the BOD. That is a lot of voting power that can push the company around -- you can expect them to hold on to those seats for as long as they have a significant ownership stakes.


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[john]

No, 79%. The amount of equity increased signficantly today.

~~~~~~~~~~~~~~

Prior to Phase 2 of the Liberty deal, there were 3.8BB outstanding Common and Preferred shares -- valued at $496MM. After Phase 2 of the Liberty deal, there are now 6.3BB outstanding Common shares (post Preferred conversion) -- giving that equity a market value of $889MM.

The equity market value increased from $496MM to $889MM... a 79% increase.

Normally with that much dilution, a stock's price would drop significantly -- as the market value would stay roughly the same. In this case, the market value of the equity jumped significantly. The market absorbed the dilution news -- and rather than sinking the price, it was a slight/moderate increase to the pps. But in all reality, the equity value increased signficantly.

Now, it will be interesting to see what value the market places on the equity going forward. After the 2003 restructuring, the value of XM and Sirius combined was around $4BB. At the time of the merger, the combined value was around $12BB. Currently, it is just under $900MM (up from about $500MM). Where will it be valued eventually in a good economy? $6BB? If so, that would put the pps at close to $1 someday... not for awhile though.

That's why a reverse split is imparative now, IMHO.


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As I agree what did you expect. The deal was finalized, wohooo, its to bad the deal still sucks. We got 40% of dilution as a fee.

[asm610]

relmor, asm...

Our comments are still there at SA. Brandon has 30 comments (including our 6 or 7) so about 23. And mostly first timers...he's done. Have to say though he got ripped real good over there. I was LMAO...

Not to be a jerk...but he deserved it. Enjoy your weekend man. Everyone else as well....at least there is one less worry on the table for right now, and reason to celebrate another smal battle won in this test of cojones!

[relmor2003]

No, 79%. The amount of equity increased signficantly today.

~~~~~~~~~~~~~~

Prior to Phase 2 of the Liberty deal, there were 3.8BB outstanding Common and Preferred shares -- valued at $496MM. After Phase 2 of the Liberty deal, there are now 6.3BB outstanding Common shares (post Preferred conversion) -- giving that equity a market value of $889MM.

The equity market value increased from $496MM to $889MM... a 79% increase.

Normally with that much dilution, a stock's price would drop significantly -- as the market value would stay roughly the same. In this case, the market value of the equity jumped significantly. The market absorbed the dilution news -- and rather than sinking the price, it was a slight/moderate increase to the pps. But in all reality, the equity value increased signficantly.

Now, it will be interesting to see what value the market places on the equity going forward. After the 2003 restructuring, the value of XM and Sirius combined was around $4BB. At the time of the merger, the combined value was around $12BB. Currently, it is just under $900MM (up from about $500MM). Where will it be valued eventually in a good economy? $6BB? If so, that would put the pps at close to $1 someday... not for awhile though.

That's why a reverse split is imparative now, IMHO.


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Homer, excellent post. Your correct. But we will now have to debate market cap and fair value for the company. At this point, assets only, they are undervalued at .14 cents, regardless of todays dilution. That dilution was "priced in " and assumed the day the vote was announced. Check the stock price since then. Now, if they manage to only dilute to 6,88 billion, that avoids "priced in full dilution" and should benefit the stock price going forward. So will any further removal of debt and return of shorted shares, and lent shares for that purpose. Thanks for the information and clarification Homer, as usual your insight is invaluable.
I think 7 billion market cap is too low, hence R/S is not inevitable, nor 100 percent likely. But I do feel they will do it, just not at these levels. They will attempt to see if the price can correct itself over time, as quarters improve, COH is added, and overall market conditions can only get better(Im hoping anyway). Car sales are near there bottom, and I dont expect GM to go out of business. I value their market cap right now around 4 billion, which puts them around .75 cents a share. Thank you.

[Wolf Child]

Hi, I know they refer to Sat Rad as discretionary spending but to Americans somethings that fall under that label are "necessities"

1. Cigarettes
2. Booze
3. TV
4. Radio
5. Pay for view wrestling
6. Pizza
7. Cell Phone
8. Internet
9. Dope
10. tattoos and piercings

Check. Got em!

[mogami]

Hi, Well they have not filed the SEC form for issuing Liberties common so as of today the float is still 3,513,401,000
The new 40% has not impacted SP because it has not yet taken place

[asm610]

As long as they have 40%+ of the common, they can demand to have seats on the BOD. That is a lot of voting power that can push the company around -- you can expect them to hold on to those seats for as long as they have a significant ownership stakes.


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Homer,

I don't see where they would be in a hurry to convert the shares at this time to common....do you know something.....because unless you convert those shares....there is no dilution.

[relmor2003]

As I agree what did you expect. The deal was finalized, wohooo, its to bad the deal still sucks. We got 40% of dilution as a fee.

Right. Deal has sucked, and always sucked. Why I wish Ergen won, as I said, it couldnt have been WORSE. Why? How can you get worse than that? LOL

[relmor2003]

Homer,

I don't see where they would be in a hurry to convert the shares at this time to common....do you know something.....because unless you convert those shares....there is no dilution.

Wrong. That dilution is now. The conversion would only hurt worse, as they might then enter the float, and add to shorts, market manipulation, etc...
But if Malone converts, I dont feel he will sell any shares, as his end game is full control, as well it should be. No worries on him diluting the float, but unfortunately the diltuion of value still exists.

[tucknroll]

tnr,

It's in the cards...but I don't think any time soon. As I said, it needs a little upward momentum first.....to do a R/S now would be absolutely useless and the wrong move RIGHT NOW!

asm610,

sounds good to me, snagged a few more shares when it was bouncing btw .135 and .141....thanks for the info