During this extremely rough economic period, more companies are in danger of breaching minimum share value rules and becoming delisted. Sirius XM Radio Inc. is one of these companies, but the NASDAQ may be seeking to inject some good news for investors.
Of course, Sirius XM Radio (SIRI) isn't in the only company suffering from the deepening economic crisis. The NYSE may be delisting the most companies in five years - 22 stocks closed under $1 on the exchange, compared to just one at the end of 2007, according to Bloomberg.
On the NASDAQ, 263 companies closed below $1 yesterday - compare that with 53 at the end of 2007. But the exchange is seeking to lengthen the period a stock can trade below the limit before a delisting.
"You're now dealing with extremely high-profile companies," said Glenn Tyranski, senior VP of financial compliance at NYSE Regulation Inc., referring to Lehman Brothers Holdings Inc., Bear Stearns Cos., Washington Mutual Inc. and IndyMac Bancorp Inc.
So what does delisting mean? Delisting makes it "more difficult to buy and sell the stock," according to Joel Hasbrouck, the Kenneth G. Langone professor of finance at NYU's Stern School of Business. "After a company is delisted from the NYSE or Nasdaq, it usually trades on one of the much smaller and less liquid markets."
But the severe drop in share prices has prompted Nasdaq CEO Robert Greifeld to seek regulatory approval from the SEC to extend the time a stock can trade under $1 and remain listed on the exchange.
"We have started the advocacy process with the commission," Greifeld said in a conference with issuers.
If successful and the delisting period is indeed lengthened, there will be collective sigh of relief coming from SIRI investors... at least for now.
[Bloomberg]
Sigh. At least this is semi-good news for the stock. First in quite a while. Hopefully, they'll have some time to right the ship.
Still, it seems as if the FCC's blatant attempts to destroy this company might still happen.
I KNEW the merger was a bad idea. At least before the merger XM stock was in the double digits.As soon as Sirius took over the stock tanked.I can't understand how Sirius took over XM when at the time of the merger XM was the stronger and more profitable company.
This company is on it's death bed, Mel with golden parachute in hand is at the door. I predict within 3 years you will see the big NO SIGNAL on you're screen.
Mel will have run the final death nail into this company.
Ryan, this is your all-time goofiest article. Any delisting could not take place for at least 6+ months and probably 9+. Have you gotten so negative that ou think this stock will still be below $1 next April? Do you think any investor should be worried about this now? We are looking at high OEM penetration, $425+ in merger synergies, new radios and plans, projected EBITDA profit, projected positive cash flow, and liqidity being pumped into the economy which should ease refinancing. I don't think Kamazin was praying for delisting relief as suggested by the article's photo.
Rodney Russell wrote: "I can't understand how Sirius took over XM when at the time of the merger XM was the stronger and more profitable company."
Have you ever heard of Kmart? They took over Sears. That deal was done on a damn golf course.
Smaller companies get involved with bigger companies all the time.
Mel must go !
"Sirius XM Radio (SIRI) trading at 47 Cents, Really?"
"The dirge is just about over for Sirius XM (SIRI). The stock has marched down so far that the market is saying there is little prospect for recovery. The company is plagued by a combination of two things it cannot escape: tremendous debt and a business which has lost most of its growth prospects... Sirius has more than $2 billion in debt. That could not be refinanced today."
http://www.thestockmasters.com/SIRI-100908.html
Sorry guys, SIRI is history.
We better hope that this company can survive and if it stops giving out millions to celebs that no one listens to like Oprah and Mad Dog our chances will be better.When I walk through the shop and hear Spotlight playing on Testicular Radio twice an hour I know there is no way that I want to see SiriusXM go under because that other crap is not an option.
Just for speculation purposes let's say Karmazin steps down . Who would take over ? Parsons ?
With everything going to hell, Mel and Company should be cutting everything across the board starting with the XM headquarters.
If SIRI XM goes down, it will file for Chapter 11, so it's likely to still survive. The company has enough value that I can't see a Chapter 7 ever affecting people.
Yeah, if Chapter 11 occurs, stockholders are gonna be pissed, but the consumers should be happy, at least for the short term.
I dont see how this combined company survives in its current form. Now, SIRI XM isnt history as some has speculated. They arent going away. But they are going to have to reorganize. There are over a billion shares outstanding, there is no way they can raise more capital in this market, and their major market, cars, is in the toilet.
They will simply declare bankruptcy, wipe out the existing shareholders, come back out with new shares and start over. This also gives them a chance to renegotiate these super expensive contracts and maybe get rid of some of them, like the NFL and MLB contracts. They simply need to go back to where they started, good music channels, entertainment, news, and some general sports.
I told you when Mel Bad-karma came on board he was there to kill Satellite Radio from within. What would you expect from a lifelong terrestrial broadcaster?
Delisting or not, this is sadly the end of SatRad.
"With everything going to hell, Mel and Company should be cutting everything across the board starting with the XM headquarters" Really explain why ?
The HG in DC is owned, not mortgaged and the DC and Federal Gov't provided tax breaks for locating there. There is room for every NYC employee to move there and still have room for growth. Unlike SIRI that rents a few floors for millions of dollars a year. At a minimum SIRI operations should be moved to the lowest cost center. Maybe Mel shoudl agree to reduce his Salary to 0 until the storm ends.
The proof will be in the salary numbers. Also the CFO recently left and took 4.5 million in cash and Nate will be getting $10 million, The others that will follow will cost 15-20 million more based on SEC documents.
A fool pays rent.
How about a reverse split to remedy the issue?
Here, here!
I've had Sirius since 2004 and I don't know what I would do without it while I'm driving.
They need to cut these expensive celeb contracts and focus on the music. How many people actually subscribe to just listen to Oprah, Martha Stewart, Doctor Radio and their other 'specialty' channels? I can see why Howard and O&A are a draw. That is fine, but 500 million for two channels is ridiculous. It's time to go back to what made satellite radio unique.
Someone said Sirius XM radio should focus on good music. That would mean retooling there entire playlists because there music sucks. I'd gve XM the slight edge just because Sirius is trying to hard to sound like FM radio. Without sports and talk my subs to both XM and Sirius would be long gone. Sirius doesn't get alot of subs for its music to begin with. If Stern never came to Sirius it would be over for Sirius. There music was never a big draw. When all they had was music they had less then a million subs. Add Stern (biggest factor), the NFL, and NASCAR the subs go up to almost over take XM. That says alot about talk and sports compared to the shitty music they play.
I predicted a few weeks ago, aside from their stock value, that within 2 years, satellite radio would be at least $20/mo and be reduced to 50 or so channels. I'd like to expand this prediction to suggest that it will be "rescued" by a private individual or other entity. Personally I think satellite radio is a wonderful and immensely practical thing, and hope it continues. Although I have to admit that, as a fan of internet radio, satrad does have its limitations.
I agree, Oprah and Martha, and even some of the sports stuff, simply legitimizes the profanity that constitutes the popular channels. But the salaries have got to be more realistic. I hope Howard doesn't mind getting his salary reduced!
I basically listen to 1 channel on Sirius (Stern) and 1 on XM (Watercolors). And it's worth the price of admission.
Given the wealth of Oprah and Howard Stern, they should be paying for these technologies, rather than being paid.
"Given the wealth of Oprah and Howard Stern, they should be paying for these technologies, rather than being paid."
That is a dumb comment because entertainers do not pay to entertain. The goal is to be paid. They thrive to be successful, to obtain a higher salary. Howard Stern will not take a pay cut for the benefit of Sirius. If Sirius was not paying him his lucrative salary Stern wouldn’t give a damn about that company. If Clear Channel offered him 800 million for five years I guarantee he would be back on terrestrial. It's all about the money. No loyalty to Sirius. Same thing goes for Oprah and anyone else in the business. My guess is contracts will become more expensive as time goes on.
Cutting the expensive contracts also means cutting the subscriber base. I believe many of Stern’s fans have Sirius strictly for him. As many Opie & Anthony fans have XM strictly for them. Stern retires or broadcasts elsewhere it’s just about a guarantee Sirius will plummet in subscribers.
I believe Sirius defeated XM because of the name recognition Stern brought to Sirius. XM had a five million-subscriber lead on Sirius until Stern signed and began bringing in subscribers. They may not have signed up for Stern but because Sirius was now the name brand in satellite radio.
I’m not a Stern fan at all but the guy has a lot to do with the subscriber success of Sirius. The big money is what keeps the big names. Stop providing the big money and super talent will not sign.
synreco, this article was right on! SIRI is well below $1 and will continue to be so.