Sirius XM Radio Inc. has asked shareholders for the right to declare a reverse split of its
common shares (by a ratio somewhere between 1-for-10 to 1-for-50) in an effort to lift its share price and avoid the risk of being delisted from Nasdaq, the company said.One of Nasdaq's criteria for remaining listed on the exchange is that a company's common stock must have a trading price of $1/share, and remain at that level for 30 straight business days.
Sirius XMshares have traded below $1 since September 19th.
"Although our common stock's trading price has not been below the $1 per share level for 30 consecutive trading days ... we believe that approval of this proposal would significantly reduce our risk of not meeting this continued listing standard in the future," the company said in a statement.
Already approved by Sirius's board, the plan would shrink the number of outstanding shares from anywhere from about 65 million to 320 million shares from the current 3.2 billion shares.
In the filing, the company also asked shareholders to approve a plan to increase the number of authorized shares of common stock to 8 billion from 4.5 billion. Sirius has about $1.05 billion in debt due to mature in 2009, and may sell stock to pay the obligation if it's unable to refinance.
Howard said he is going to do something great next year. How about now? Ask all your fans to turn a friend onto the show. The show is great don't be scared the new fans will get it.
This will be fun to watch.
It's not every day you see a company try to drastically dilute a stock that's already selling at 37 cents a share. Amid the certainty of a draconian reverse split.
When the merger was announced, XM management told shareholders that the merger would be the quickest way to get the stock back to the $20s or even the $30s. It was selling at around $17 a share at that point.
Today, a few months after the merger was consumated and XMSR shares disappeared into the black hole that is Sirius, an XM share would be worth exactly $1.70 per share.
If you listen to ANY of the last 4 times Mel Karmazin spoke, you will hear just the opposite of what he is proposing. The fact that Mel Karmazin (The radio Giant) is associated with a stock price of 37 cents makes me cringe. Honestly, was the merger not intended to bring the stock up? How does a CEO like Mel come to a company with 1 million subs and a high of 9.43 and drive the stock down to 37 cents 4 years later. Meanwhile the Deloitte and Touche give Sirius an award for being the fastest growing company of 2007. I really hate to think Mel would be involved in scam, but wow is it pointing in that direction.
Way to go Mel. After what's been done to the eployees of XM in Washington, it's kind of hard to care what happens to Sirius XM. I know I don't.
i'm somewhat ignorant here someone help me out this is a last ditch effort to maybe save this company, correct. At the same time my share value could decrease many times correct? my 30,000 shares could go to almost nothing, correct? Someone with some knowledge out there explain so i can try to save what little cash i have left. Thank You, mike Scott
You forgot to mention that the following day, NASDAQ put out a rule change to suspend the delisting criteria until January 19th, 2009.
Therefore, Sirius wouldn't restart the 30-day window until then.
un friggin real huh? hey Mel.... issue more stock and then reverse split, takin the sheep for another ride Huh?
OK.. here is how it will work... "?thanks for funding XM and Sirius radio" as they dilute the hell out of the original beleivers.
this filing will do nothing to bolster the stock price, rather it feeds fears on the probability that refinancing the huge debt load may not be easy. (Gee Didn't I mention this pre merger??) this in turn garuntees the reverse stock split, in essance driving the stock price down more.
Once again... GO TO HELL MEL
P.S. glad I sold in August. This turd got caught in the muffin monster.
...at least it's something. Some mutual funds won't add a stock if it's under $5.00, so if it's a 50 for 1 reverse split, that should price it high enough to be an ok stock.
Please vote for this so I can continue to offer options that are poor to consumers, yet line my pockets.
I am sorry to say that I forsee Sirius/XM going out of business. It's a shame since it is a great service. I honeslty feel that the music quality on XM has gone to crap.
Sirius/XM... Time to recite the famous words...
"Your mom's box"
all of us averaged over $2 are SCREWED !!!!
Totally without consequence. Other than it gives it a much bigger drop to get to zero. I guess that's a good thing.
There are currently 3.18 billion outstanding shares. Theoretically, the effect of issuing an additional 3.5 billion shares would instantly drive the price down by more than 50%, never mind the negative sentiment caused by a reverse split. So even with a 50:1 reverse split, the stock will still be less than ten dollars and it will be all downhill from there. In effect, this would also multiply my cost basis by a factor of fifty. Does anyone know when the stock will be hitting $172 per share so I can break even?
"my 30,000 shares could go to almost nothing, correct? Someone with some knowledge out there explain so i can try to save what little cash i have left. Thank You, mike Scott"
Um, Mike. Let me get something straight, and please, don't take this the wrong way.
You own 30,000 shares of stock in a company, and you don't even understand what a reverse split is?
So, let's do a little math. Let's say you bought in at the $5.00 zone. Quite a low ball estimate, IMHO. That means you've lost close to $140,000 so far.
Dude, Vegas offers better odds. Such a financial disaster would wipe me out.
Take what money you have left, and turn it over to a professional (someone who knows where the shift key is, perhaps) and build some equity.
This is a backup plan b if the refinancing doesnt go through--It better to be safe then have to scramble if it falls through
Sirius XM: 40 cents
World Wrestling Entertainment: $14.36
'Nuff said.
Basically a reverse split is a consolidation of shares to keep it from dropping into the void known as junk or penny stocks. On the day of the "reverse split" you will have the same overall dollar amount but fewer shares. In other words, using Chinese arithmetic to increase the stock value! At the rate Grand Master Mel is going, you could always request your actual stock certificates and come out ahead (have you sen the price of Charmin lately?).
Wow, the MotleyFool actually called this one and got it right. That's rare.
A reverse-split is simply a ego-booster to the shareholders, nothing more.
What I can't believe is that they're actually going to issue almost another 3.5 billion shares before the split. How could they dilute so many more shares before hand? That's just scary.
They should just reverse-split with what shares they have and do a 5:1 or 6:1. Diluting more shares beforehand may send a bad message to those still holding this stock. Ouch.
I as a shareholder will vote against it.
I have lost more than 60,000.00 on this stock and would rather see it go bankrupt than dillute my holdings tenfold.
either way I lose so I say shareholders band together and hold Mel to what he told us.
You guys are the idiots for putting more money then you can afford to lose in any one stock...Like the previous poster said, If you took your 100k and went to vegas and put it on one hand and lost you wouldnt complain, So dont complain when your one hand in the stock market doesnt win either. Its called taking the good with the bad. its not Mels fault you put your life savings into Sat Radio LOL!!!! Morons on this site I tell you!
If the situation is as bad as it appears, why wouldn't Sirius XM just include the "Best of" packages in the basic "Everything" package instead of trying to milk an extra $4.04 out of a few people? I would think this would be a huge way to boost subscriptions. I would much rather have millions of new people subscribing to the service instead of a million or so paying an extra 4 bucks. It's not like it would cost Sirius XM anything to do this. With the holiday season approaching, the time is now.
Im not complaining. I accepted the risk when I invested. I have plenty of time to recoup.
what does bother me though is how full of BS Mel was in every pre-merger interview and how he destroyed the stock raising capital to get it done.
he lied to everyone and then screwed us by diluting the shares beyond belief without giving anyone warning about what he was doing.
And now he wants to reverse split and go private.
All of which he said wasn't in the plan before the merger.
Don't call me a "moron" when "sucker" is the more appropriate term to use.
Well, think of the profit. Simply short the heck out of it after the reverse split, it doesnt have the finances or the revenues to support a higher stock price than a few cents. Bankruptcy and reorganization are inevitable after the reverse split, so you can short it to zero and make max profit.
This was not too hard to predict when SIRI took over XM. It would have happend to SIRI without XM. It was an ill concieved merger and why XM went along with it I will never know.
But I doubt sat rad is going away, its too good. They will simply reorganize, wipe out the existing shareholders, and come back out with new financing and new stock. Maybe then it will be worth going long on
Ariel
I think it's more an effort to not get delisted... BTW another 67 million shares issued, keep watering down the dog shit koolaid. This stock is a loser, take whatever pocket change you have left and buy a burger
It is very, very simple. VOTE NO!!!!!!!!!!!!
VOTE NO! When Uncle Sam deregulated my First Class FCC License 30 (+/-)years ago, they opened the floodgate to the Clear Channels, the Cumulus', Citadels, et al., and for a long time, the lack of regulations gave way to high gaining profit stocks and hordes of uneducated, ill-qualified "announcers". Unlike Sirius XM, high operating overhead for earthbound stations combined with poor programming quality compunds these conglomerates economic issues of 2008, way beyond the issues of Sirius XM. Look at how hard they fought to stop the merger. Their stocks are also in the toilet. You can buy Citadel for .26/share. Clear Channel was $100 + on 9-10-01. Now it's $30 (+/-). It's not just Sirius XM. Broadcasting in general took a nose dive within weeks of 9/11.
I've worked in broadcasting many, many years. satellite radio is now. It's our future. The Clear Channels continue to sink lower and lower in programming quality. Satellite radio will dominate. >>>>>>>>>> HELP FIGHT THE REVERSE SPLIT >>>>>>>>> VOTE NO!!!!!!!!!!!!!!!!!!!!!!
Mel,Mel,Mel. Whatever, Dont think for one second that the owner of Circuit City imagined 12 months ago thought he would be going bankrupt starting wed. Its called resession. Some buyers think SIRI is an opportunity at .30 cents a share buying them buy the thousands. I'am a SIRI shareholer and if lose it owe well cant expext to win every draw at the table. It was money i could afford to lose or i wouldnt have never gambled with it in the first place. All company owners are laying off buy the thousands and cutting back buy the millions trying to save there company, understadable. Blame the banks for what is happening to your stocks and not the owners. And dont gamble with money you cant afford to lose.