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Sirius shareholders are PO'ed.

2K views 10 replies 6 participants last post by  barbie845 
#1 ·
I saw this on the XM fan site. I thought I would post it here. It seems the bump in stock price everyone expected after this merger isn't happening and many shareholders are quite upset.


Shareholders Fighting SIRIUS XM To The Core (SIRI)


Sirius_logo If you are one of the hundreds of thousands of investors following penny stocks and low-priced stocks such as SIRIUS XM Radio Inc. (NASDAQ: SIRI), then you will be among the many who are not all surprised that shareholders are going back after this company again. Over 500 shareholders have banded together and are going after SIRIUS XM's management.


According to the press release, the group is using Racketeering laws under the RICO Act, breach of fiduciary duties, and the Sherman Act.


The goal is to oust management and to prevent further dilution and possible reverse stock split. It may also prevent Mel Karmazin from being able to take the company private as some reports and speculators have discussed.


Based upon the horrible share price performance and based upon the questions over whether or not it will be able to keep its stock exchange listing, it is really difficult to think that a large shareholder group that has banded together won't be able to be ignored by the company or by the media to force at least some of the changes.


Jon C. Ogg

November 3, 2008


Below is a copy of the full release which was sent directly to us from the "Save SIRIUS" source.



SIRIUS Shareholders File Suit Against SIRIUS XM Radio Management


LOS ANGELES, Nov. 3 /PRNewswire/ -- The following is being issued by

"Save Sirius":


A group of incensed shareholders, over 500 strong and growing, have

banned together and accused SIRIUS XM management of unjustly enriching

themselves at the expense of shareholders.


A derivative suit on behalf of shareholders has been filed in the

United States District Court, Central District of California, Southern

Division. Case number SACV08-00790CJC


continued..

http://www.247wallst.com/2008/11/shareholders-fi.html
 
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#3 ·

Quote:
Originally Posted by ti-triodes /forum/post/14999145


According to Howard, only terrestrial radio is having problems.

I'm sure he's seen the price of his SIRI stock.



I can't blame him though, or anyone at SiriusXM trying to stay optimistic.


Things look bleak. There's lots of money problems on the horizon.


The next 6-12 months are going to be critical to their survival.
 
#4 ·
The market has been getting slammed these past two months.


they think sirius/xm should be up while every other stock is down.


hogwash!
 
#5 ·

Quote:
Originally Posted by mercury /forum/post/15001850


The market has been getting slammed these past two months.


they think sirius/xm should be up while every other stock is down.


hogwash!

I'm sure that's part of it. But if you look closely SIRI was taking a beating before the market started on it's recent slide.


The company is in trouble. I hope for the best, but the more I read about this mess I fear for the worse.
 
#6 ·
Three months after merger, Sirius XM struggles

Satellite radio company faces $1 billion debt, hurt by lagging car sales

Billboard

updated 4:55 p.m. ET, Sun., Nov. 9, 2008

DENVER - Barely three months after the long-delayed merger of satellite radio companies Sirius and XM, the newly combined Sirius XM Radio is struggling to stay afloat.


The company has just another three months to start paying down more than $1 billion in debt that's maturing in 2009 at a time when credit markets are freezing up. It remains heavily dependent on automobile sales for new subscriber additions just as U.S. car sales are tanking. And its stock price is in a yearlong free-fall that has sparked an investor lawsuit.


For the music industry, the fate of Sirius XM looms larger than before. Under a U.S. Copyright Royalty Board decision made last December, satellite radio broadcasters like Sirius XM pay performance royalties for sound recordings based on a percentage of adjusted gross revenue. That means the better Sirius XM does, the more money labels and publishers make.


That rate currently stands at 6 percent and is set to increase by half a percentage point every year until 2012, when it will reach 8 percent. Neither SoundExchange which collects those fees and distributes them on behalf of the music industry nor Sirius XM will reveal exactly how much the company is paying in royalties. According to Sirius XM's quarterly reports, the company paid out a combined $92 million in revenue-sharing and royalty payments during the first half of 2008. That includes payments to SoundExchange and other partners, like equipment suppliers.


But while the music industry is poised to collect a growing percentage of Sirius XM's revenue, that revenue is in trouble. Subscription fees account for about 95 percent of Sirius XM's revenue. To increase income, the company needs to add subscribers and squeeze more revenue out of existing ones. The company reported 18.6 million subscribers as of June 30, up from 15.3 million for Sirius and XM combined a year earlier.


But Wall Street is deeply pessimistic about the road ahead. On Nov. 3, Merrill Lynch analyst Jessica Reif Cohen cut her previous forecast for net subscriber additions by almost 50,000 for the third quarter to 409,000 which would represent a 51 percent smaller increase from the same period last year. She also cut her third-quarter revenue prediction for 2008 to $611 million, up from $528.8 million a year earlier but down $7 million from her previous forecast.


Slowing auto sales are driving some of the problems, since about half of Sirius XM's current subscribers and about 80 percent of new subscriber additions in the second quarter received satellite radios when they bought new cars.


A Sirius XM spokesman says that will be offset by an increase in the number of cars carrying its receivers as a factory-installed option. Its penetration rate among Mercedes-Benz vehicles, for example, is nearing 90 percent.


The company hopes to attract new subscribers by adding short-term, artist-specific channels dedicated to the likes of AC/DC and Led Zeppelin, which a representative hinted would be an ongoing initiative.


In the meantime, the company faces urgent financial challenges, in particular the $1.1 billion in debt that will mature in 2009, about $300 million of which is due in February. That, among other concerns, has caused the company's stock price to fall from a 52-week high of $3.94 per share last December to 26 cents on Friday. Meanwhile, a group of 500 shareholders dubbing themselves "Save Sirius" filed a lawsuit seeking to remove the board and CEO Mel Karmazin.


Ever the pitch man, Karmazin spoke at Nielsen and Dow Jones' Media and Money conference in October, insisting that Sirius XM is "one of the top 25 media companies today" and predicting that it will be "the most successful company in the audio entertainment industry."


Should that come to pass, the music industry stands to make a decent buck. But in the present, there's not much to count on.



© 2008 Billboard

URL: http://www.msnbc.msn.com/id/27632590/




MSN Privacy . Legal

© 2008 MSNBC.com
 
#7 ·

Quote:
Originally Posted by barbie845 /forum/post/15003018


I'm sure that's part of it. But if you look closely SIRI was taking a beating before the market started on it's recent slide.


The company is in trouble. I hope for the best, but the more I read about this mess I fear for the worse.

That's why I went for the music only ($9.99) and just monthly payment. I don't want to tie up on a big membership because I fear that sattelite radio will be dead in less than 1 year.
 
#8 ·
I hate to discuss finance on an AV forum because, no offense to those posters above me, very few people here know anything about finance or economics. This would be like going to Fatwallet Forums or Bogleheads and asking for Stereo advice.


A few comments:


1) Sirius stock is down over 95% while the rest of the stock market is down 30%. Thats a fairly substantial difference. Its not fair to compare the general stock market decline to the sirius decline.


2) One reason Sirius went down is because they created new shares of stocks in order to pay off debt. Now they have a much healthier balance sheet. Its basically like if there was 100 shares of the company before and they printed 100 more shares. Each share is now worth half as much as before because the value of the company is the same. However now the company is not in as much (billions of dollars) of debt.


3) Sirius NEEDS to do a reverse split ASAP! It is down to 20 cents per share. They need to do something like a 10 to 1 split so that if you own 10 shares at 20 cents each for $2.00 then you now own 1 share worth $2.00. The value of your shares is still the same, however its going to be delisted from the stock market exchanges because there is a rule that stocks below $1 per share are not listed on certain large stock market exchanges. The OPs article links people protesting the reverse split. Thats ignorant.
 
#9 ·

Quote:
Originally Posted by snickersbar /forum/post/15099209


I hate to discuss finance on an AV forum because, no offense to those posters above me, very few people here know anything about finance or economics. This would be like going to Fatwallet Forums or Bogleheads and asking for Stereo advice.


A few comments:


1) Sirius stock is down over 95% while the rest of the stock market is down 30%. Thats a fairly substantial difference. Its not fair to compare the general stock market decline to the sirius decline.


2) One reason Sirius went down is because they created new shares of stocks in order to pay off debt. Now they have a much healthier balance sheet. Its basically like if there was 100 shares of the company before and they printed 100 more shares. Each share is now worth half as much as before because the value of the company is the same. However now the company is not in as much (billions of dollars) of debt.


3) Sirius NEEDS to do a reverse split ASAP! It is down to 20 cents per share. They need to do something like a 10 to 1 split so that if you own 10 shares at 20 cents each for $2.00 then you now own 1 share worth $2.00. The value of your shares is still the same, however its going to be delisted from the stock market exchanges because there is a rule that stocks below $1 per share are not listed on certain large stock market exchanges. The OPs article links people protesting the reverse split. Thats ignorant.


You write now they have a healthier balance sheet? From everything I've been reading I think you are jumping the gun there.


And the stockholders aren't just protesting the reverse split, which BTW is almost never good news, they are also protesting the fact SiriusXm wants to sell a whole bunch more shares to further dilute it's shares. THEN do the reverse split.
 
#10 ·
i would be pissed also if this was my stock
 
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