SIRIUS Weekly Thread Week of 2/22/2010

[Big Ben]

Sure do, helps see the trends develop and where the biggest blocks are sitting. Also helps to know which outfits are the most reputable, I have heard CINN, BATS, ISEG can move the a stock pretty affectively if they want. The tip was from someone on here, they said if they are pushing a stock down or up it is going to move. I honestly have never seen this in action but I don't follow it that closely and truly it moves so fast sometimes I don't know what I would be looking for. Probably their names at the top of the bid and ask columns trading back and forth? Not sure though.

Big Ben

[proactiv]

Good move on FAZ, what was your entry point and are you starting a position?

Ben, I'm also bearish on AEM and SLW long. But I'll save any other discussion on this for the other thread..

Glad you're feeling better.

[proactiv]

250 FAZ off the board, 17.57...that is a steal! Proactiv if your adding to your position that is a great price, this baby can swing back to 20 in no time. Big Ben

Hey Ben,
Somehow I dropped my first response to you.. I'm in with FAZ at 18.09. Thumbnail opinion.. The other real estate shoe will drop soon - on the commercial side - and banks will suffer again.

[proactiv]

I absolutely love Silver Wheaton's business model. Check 'em out.

[SiriuslyLong]

I absolutely love Silver Wheaton's business model. Check 'em out.

Thanks Proactiv - SLW is now on my watch list. Looks like it's hot right now before the March 5 CC. Financial statements look pretty good. Good growth in revenue and CF, and Assets to Debt is outstanding. Most certainly a good prospect. The only red flag it the P/E ratio which is astronomical, but that may change on the 5th. I'll watch it while looking for an entry point.

I think I've said it before, but I've taken to some commodity based stocks, ETF's and mutual funds as a hedge against a weak $. What the pundits didn't think about is that other countries might very well be in worse shape than the US. I'm starting to think that the only commidity worth anything is good old oil. Start thinking Mad Max.

While there is still civilization, BM what an article about what Liberty will do with SIRI. Two options "take liquidity out" or take control. I can't say I read it well, but his point was that there will not likely be full dilution as referred to in the WSJ article. As SRK so eloquently pointed out. SIRI has $380,000,000 in cash which is nice, but what are Liberty's shares worth? I think SIRI would need a hell of lot more to buy those shares back.

[just sirius]

Siriuslylong

I think we would need to add 3 more 0's at the end of the cash and cash equilavents. Liberty's stake is worth approx 2.8B now per their CC if my memory serves me correct.

have not read BM article...but Greg Maffei of Liberty did mention both of those options in the Liberty CC.

Have a great w/e!

Just Sirius

[proactiv]

I'm starting to think that the only commidity worth anything is good old oil. Start thinking Mad Max.

I'm with you there, SL. I'm a pretty big fan of hard commodities nowadays, and I especially like silver and gold. I'm betting gold tops 2K/oz in the next 18 months. Maybe more.

In the meantime, let's watch SIRI. It's gonna be an interesting year.

[Sirius Roadkill]

SIRI has $380,000,000 in cash which is nice, but what are Liberty's shares worth? I think SIRI would need a hell of lot more to buy those shares back.

The instruments governing our indebtedness contain covenants that, among other things, restrict our ability to incur more debt, pay dividends, make distributions, make certain investments, repurchase stock, create liens, enter into transactions with affiliates, enter into sale lease-back transactions, merge or consolidate, and transfer or sell assets. Failure to comply with the covenants contained in the indentures and agreements governing this debt could result in an event of default, which, if not cured or waived, could cause us to seek the protection of the bankruptcy laws, discontinue operations or seek a purchaser for our business or assets.

p.s. big red font not targeted at you SL; the whole repurchase theme is a constant one that continuously comes up in the forums . . Big Ben mentioned it about 2 weeks ago; it's intended for those in the general population, voluntarily incarcerated here at da'BUZZ

[Sirius Roadkill]

Greg Maffei of Liberty did mention both of those options in the Liberty CC.Just Sirius

Didn't hear what Greg Maffei said in the Liberty CC . . . but I would think he needs to get to the back of the line behind the Senior Secured Debt before any repurchase of the Preferred Shares is possible . . .

Now, alternatively, the restrictive covenants could, "at the discretion of the lender," be amended and the shares repurchased through a new debt offering . . . but I wouldn't count on it anytime soon; plus that only shifts the obligation to a new counter-party and accomplishes nothing organic on the balance sheet.

Moreover, the "Investment Agreement" and "Shareholder's Rights Plan" are separate documents but must be read collectively. They are explicit in that Liberty may NOT make a cash-tender offer to purchase all outstanding shares not beneficially owned by them prior to February 2011 . . . so BM's other article of behind-the-scenes doings and an imminent buy-out of Siri by Liberty is also flawed . . . but it was a good pump-piece to issue the day before a conference call; it just has no factual merit - lol

BM is kind of the "anti-Cramer/anti-the Street" . . . nothing wrong with that mind you . . . there is a place for that to counteract the daily fomenting that goes on . . . but readers need to be aware of the track record, much of which can be found in the archives of this site itself.

Wasn't too long ago that BM and Newman cooked-up a scenario in which "Sirius" was not responsible for the subsidiary debt of "XM" and that Mel would save the company by ingeniously bankrupting just "XM" . . . pretty funny stuff; I think he put that beaut out here in Nov/Dec 2008 or so

[Sirius Roadkill]

. . . just one more fine-point on the $380mm COH . . . . that too is partially encumbered by the restrictive covenants . . . which set forth minimum cash reserve requirements.

Basically, whatever Liberty does between now and February 2011, to unlock the liquidity in all or a portion of their preferred shares, assuming they even have a desire to do so, would have no impact on current share price; the dilution of those shares is already baked-in.

Siri has no ability (and I believe no desire) whatsoever (IMO) to repurchase, retire or otherwise expunge the Preferred Shares granted to Liberty Media as part of John Malone's rescue of the company in February 2009.