Sirius-XM USA shares fall 90% since the merger.

[jwt873]

It's not looking too good.

http://www.streetinsider.com/Corpora...6/4178955.html

Shares of Sirius XM (Nasdaq: SIRI) are getting absolutely slashed today, currently down 17% to just over $0.16. No, that's not a typo. That's right... $0.16.

Investors may be selling Sirius XM stock today as a play on the extremely concerning outlook at Detroit's Big 3 automakers. The story is unfolding on Capitol Hill today, where executives from General Motors (NYSE: GM), Ford (NYSE: F) and Chrysler are testifying to Congress. The sentiment coming out of DC is not reassuring, to say the least: shares of GM and Ford are down 15.5% and 24%, respectively, which may explain part of Sirius XM's sharp downside move today.

Since the FCC cleared the merger between Sirius and XM on July 29, Siriux XM stock has lost an astonishing 90% of its value, falling from a multi-billion dollar company to about a $500 million company. With shares of Sirius XM moving as low as $0.16 today, the stock marked a new all-time low.

[johndoublej]

Yeah I noticed their closing price as well. Pretty brutal - plus there is impending legal action in the works to have Mel Karmizim removed as CEO due to porr performance and to prevent him from possibly making Sirius a private corporation. However, that may end being the only way to save the company at this point - cuz no one is buying 16 cent stock if it's only gonna get worse. Standard & Poors recently downgraded Siriu's 12 month target price from $2.00 to $.50 - and even that seems optimistic. Mind you, $1600 would get you 10,000 shares which would be a nice turnaround if it gets back to a $1 per.

[Professor Frink]

I'm buying 20,000 shares at 0.10

[Arc|Angel]

That legal case is ridiculous and has no merit. It will be tossed. Handful of crazy investors do this all the time in the U.S.

That being said. The shares price is inexplicable. The new company is more financially stable, has less staff, pays for less content, and has several new avenues to save loads of money (something like 5 million on traffic reporting alone). The only thing that could be holding it back is the potential of a stock split.

[Walter Dnes]

Originally Posted by Arc|Angel

That being said. The shares price is inexplicable. The new company is more financially stable, has less staff, pays for less content, and has several new avenues to save loads of money (something like 5 million on traffic reporting alone). The only thing that could be holding it back is the potential of a stock split.

Financial stability means more than continuing previous losses. Take a look at their income (more properly lack thereof) statements for the last 4 quarters at http://finance.yahoo.com/q/is?s=SIRI

• Ending 2007/12/31 net loss $166,223,000
• Ending 2008/03/31 net loss $104,118,000
• Ending 2008/06/30 net loss $83,899,000
• Ending 2008/09/30 net loss $121,111,000 (after a non-recurring 4 and 3/4 billion charge)

...for a grand total loss of $475,351,000 over the 12 months ended 2008/09/30. This was BEFORE the financial crisis really got going. Now with people losing their jobs, or fearing that loss, satellite radio subscriptions are a luxury that may have to go. And remember that a lot of satellite radio subscriptions come from built-in radios with free trial subscriptions in new cars. With car sales dropping by 1/3rd, that reduces the number of new car buyers being exposed to a free trial, and therefore, the flow of new subscriptions. So it looks like the losses will continue, if not get worse.

But it gets worse. there are some loans coming due in 2009...

• Sirius’ $210 million 2.5% convertible, maturing 2009/02/15.
• XM’s $250 million revolving loan, maturing 2009/05/05
• XM’s $100 million term loan, maturing 2009/05/05
• XM’s $33 million convertible discount notes, maturing 2009/12/31
• XM’s $400 million 10% convertible notes, maturing on 2009/12/31

They had $359,657,000 in cash on hand at the end of Q3. If they hoard their cash, they should be able to meet the February payment without refinancing, but that's it. They did negotiate other lines of credit in better days...

• a credit line of $100 million from Loral... contingent on SIRI's stock price being at least 31 cents... bwaahaahaa
• a credit line of $150 million from GM... bwaahaahaa

Without major refinancing, they are in default no later than May 5th, 2009, possibly sooner, depending on cash burn. The combined companies have lost several billion over the past decade or so, and have never turned a profit. What do you think their chances are of either refinancing or raising capital via a share offering in the next 6 months?

[Chumley]

Clearly, Sirius XM's biggest concern is honoring the 500-million over 5 years deal they cut with Howard Stern. Now, that was a bright move..
They'll be filing for Chapter 11 in the first quarter of 2009.

I was thinking of buying a Sirius radio in the next few weeks. I sure hope there will be a Sirius-compatible service of some sort down the road.

[Danster]

I wonder if they will be next asking for cash handout like the other businesses having trouble?

I think the merger was the worst thing they could do. I guess it's too late to go back, harm has been done.