Post by YKW (ad hoc)Post by Dave U. Random"Sirius XM Chief Executive says regular radio 'sucks,' but
his satellite radio operation is doing even worse. Sirius
stock is at a five-year low..."
Business Week article: http://atu.ca/398d
It's all about the prospects for debt re-fi. Markets don't yet see the
credit crunch abating by spring, so financial prospects for the company
-- which nearly all analysts see as turning a real-world profit (not just
an EBITDA one) for the first time in '09 -- are clouded heavily by debt-
related uncertainty.
Mel has, in recent weeks, begun to talk up the possibility of taking the
debt to a private syndicate (possibly led by his own self) or even taking
the entire company private -- possibly as a way to talk up the stock
price, but also possibly to gauge real interest in getting an actual
equity offering together.
The whole idea of a company being "private" os that there is no stock to
worry about, which frees you from a great deal of legal oversight. I worked
for a company that did the EXACT same thing. Used a high stock price to
invest in acquisitions and growth, did nothing to shore up the stock price,
let it fall to pennies, then sold it to a private equity firm that was
partially owned by the CEO.
How much do you want to bet there is a decent sized fund set up to reacquire
stock, at pennies of what the original issue price might have been....and
how much do you want to bet that Mel, other corporate directors, Howard
Stern, and others are primed to move in and buy what they can, enough to be
able to force a vote to take it private, and buy out the remaining
out-standing shares cheap.
In common everyday parlance, satellite radio stock is toilet paper and may
only have value some day as a curio.
Post by YKW (ad hoc)--
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