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SaveSirius, a group of shareholders that is accusing Sirius XM Radio Inc. of unjustly enriching themselves, served formal letters of demand to the company's Board of Directors recently.

The group demands that the company:

• Postpone the vote to increase the number of shares of common stock (from 4.5 billion to 8 billion)
• Delay the proposed reverse split, ranging from 1 for 10, to 1 for 50.
• Suspend all stock compensation plans and other bonuses immediately

"Given the NASDAQ's reprieve of delisting securities below a dollar, there is sufficient time for the Board to convene an emergency meeting to consider other options, such as but not limited to, self-funding by shareholders," said Michael Hartleib, founder of SaveSirius.

Read the entire letter sent to the Board after the jump...

Sirius XM Radio Inc. have released their third-quarter 2008 earnings results, showing that pro forma revenue increased 16% year over year, and total subscribers grew to more than 18.9 million (up 17% from last year).

Total operating costs, less those nasty merger related expenses, fell compared to last year, leading to a 64% improvement in the pro forma adjusted loss from operations of $37 million before restructuring costs.

Read the full press release after the jump...

A shareholder lawsuit has been filed against Sirius XM Radio Inc. management by a group called "Save Sirius," headed by Michael Hartleib.

The case accuses management of violations of the Federal Racketeer Influenced and Corrupt Organizations Act (RICO), Breach of the Fiduciary Duty and The Sherman Act. It seeks to prevent Sirius XM from "further damaging its shareholders with massive amounts of additional dilution" of its stock, which includes the possible 50-to-1 reverse stock split.

"We are working to gain control of our company by seeking to remove current members of the board as well as top executive Mel Karmazin," said Michael Hartleib on behalf of Save Sirius and its members, which the group claims to have over 500 members.

Hartleib insists that Karmazin intends on taking the company private, citing statements made during a September 2008 Wall Street Journal interview.

"In light of the aforementioned, it is clear that they [Sirius XM Management] have lost sight of their obligations to shareholders and have breached and will continue to breach their fiduciary duties in the future," said Michael Hartleib in a statement. "We, as a group, will not stand for this and will use any means possible to prevent and preclude them from stealing this company from its rightful owners -- we the shareholders."

Read the entire 56-page lawsuit by clicking the link below...

[Download Lawsuit (DOC)]

"There's hardly a day goes by when I don't ask myself [whether Sirius will survive]."

That's what analyst Tuna Amobi of Standard & Poor's Equity Research said to BusinessWeek in a recent article about Sirius XM Radio Inc. and its mounting debt - which will add up to more than $1 billion next year, according to the report.

Amobi, of course, rates SIRI a "buy" because it's such a cheap way to profit from any upside.

But that doesn't dispute the fact that there's a lot weighing on Mel Karmazin's shoulders right now, particularly the  $620 million in debt payments due in February and May.

"We are very confident of taking care of the [$270] million in February, and we are confident the banks will extend the maturity in May," says Sirius XM Radio Inc. CFO David Frear. The company forecasts it will be able to generate $300 million in earnings before interest, taxes, depreciation, and amortization - effectively easing its cash needs next year.

Analyst James Ratcliffe of Barclays Capital estimates that Sirius XM needs to raise $750 million to $800 million to cover its debt repayments, programming costs, and capital spending for next year.

Which brings us to the company's plan to ask shareholders to allow it to nearly double its total shares.

"I don't think they want to issue more equity," said Ratcliffe. "But given the conditions of the credit market, they may have to."

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.

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]

In an interview with Wall Street Journal reporter Sarah McBride, Sirius XM Radio Inc. CEO Mel Karmazin said he regretted a comment he said last week, and offered up some plans for helping to grow the company.

Sirius XM Radio Inc. shares continue to take a beating on Wall Street, a day after the company issued its updated guidance. And of course, the analysts are opining on the subject with opposing views.

J.P. Morgan
Barton Crockett repeated his Neutral rating on the stock this morning, cautioning of near-term issues that could continue to weigh on the stock - including debt issues and the weak auto and consumer markets. Crockett was sure to note that Sirius believes the $400 million in cash the combined company had at June 30 will not be enough to pay off the $300 million convert due in February. Therefore, the company is looking to do some additional borrowing.

RBC Capital
David Bank this morning repeated his Sector Perform rating on the stock, with target on the stock remaining at $2. Bank asserting that there are still plenty of risks, including a challenging consumer environment, merger execution risks, the refinancing overhang, a lack of visibility into longer-term fundamentals and multiple-based support for the shares given the early stage of its EBITDA ramp... to name just a few.

Citigroup
Tony Wible this morning cut his target on the stock to $5 from $6.50, but still contends the stock is "massively undervalued" given merger synergies, revenue growth from new plans and greater OEM penetration.

Stifel Nicolas
Kit Spring today repeated a Buy rating on the stock, but cut his target to $2 from $3. But let's forget about his thoughts that the new guidance was "a net negative" - Spring actually raises the prospect that the company could go bankrupt: "Downside is potentially to zero if SIRI can't refinance its debt nor sell the company - a scenario that we believe is plausible in the current environment, but looks to us to be a low probability outcome," he writes. Yikes.

At posting time, SIRI is down 16.4%, or 19 cents, to 95 cents a share.
 
[Barrons]

Sirius XM Radio Inc. today provided an update on the company's guidance for 2008-2009, and a detailed breakdown of expected 2009 synergies, in addition to revealing the "Best of" packages.

Subscriber Guidance
The company expects to end 2008 with approximately 19.5 million subscribers and to end 2009 with approximately 21.5 million subscribers.

Revenue
Sirius XM expects to post pro forma revenue of approximately $2.4 billion in 2008 and to post revenue of approximately $2.7 billion in 2009.

Adjusted EBITDA
Sirius XM expects a pro forma adjusted EBITDA loss of approximately $350 million in 2008 and reiterated its previously stated financial guidance of approximately $300 million in positive adjusted EBITDA for 2009.

Synergies
Sirius XM announced it is increasing its estimate of net synergies to $425 million in 2009.

A line item breakdown of the expected 2009 synergies will be available in a Form 8-K that the company is filing today.

"We have made great strides over the last six weeks and continue to make progress integrating the company and delivering on our promises to customers and stockholders," said Mel Karmazin. "We are finding significant cost savings on every line item of the P&L and are beginning to realize these synergies already. Sirius XM also continues to be one of the strongest growth stories in media, with pro forma revenue growth of approximately 17% in 2008."

If there's one thing that we can all admit, it's that satellite radio investors are a "passionate" group. So what better way to drive interest (and traffic) from this group than by spewing a list of negative theories that, uhm, "could" happen?

Enter a blog post by Douglas McIntyre on 24/7 Wall St., and subsequently parroted by the great Henry Blodget of Clusterstock.

Now if there's anything that Blodget knows about, it's hot air.

In McIntyre's post, he pontificates of four possible scenarios that could make SIRI "trade under $1 by the end of the year," a statement that Blodget decided to use as his headline. Here's the synopsis:

1. The synergies could be less than expected. Oh, and the merging of the two companies could take longer.

2. Sirius could find that the refinancing of $2.5 billion in long term debt is "nearly impossible in a poor credit market."

3. Satellite Radio growth rates could suffer because of the slowing automotive market. Oh, and then there's the iPod!

4. "Sirius could loss [sic] key management." Because, y'know, Mel will be 65 soon, and now that the merger is over he'll want to retire.

The comments to Blodget's post (24/7 Wall Street doesn't allow for comments, I wonder why?) are particularly hilarious, especially since Blodget had to answer, again, to his dotcom specter. This comment is my personal favorite because it addresses each of the "possible" scenarios.

But why stop at just four? C'mon Blodget could have come up with some better speculative scenarios all in the name of "research and analysis." You're good at that.

Let me help out. Here's five more things that could happen to a now newly merged Sirius XM Radio Inc. that would drive SIRI down the toilet:

5. NAB president David K. Rehr could sneak into Mel's office, sit in Mel's chair, take all his phone calls pretending to be Mel, and issue poor decisions (like he did the past 18 months) that would spell the demise of the company.

6. Military rockets could shoot down one of Sirius' satellites at the perfect moment, and ricochet hurling pieces of space junk to take out all of XM's satellites at the same time. No seriously, it could happen!

7. Rats could eat all the fiber in The Eck, causing a malfunction that would domino nationwide, ultimately making all of XM's repeaters towers to start over-transmitting and making the FCC really really angry.

8. Howard Stern could quit Sirius and go podcast willy instead. (Hmm, actually, that's not very funny.)

9. The iPod is coming! The iPod is coming! Oh wait, the iPod has been here since 2001 and is maturing. Bah, who cares! the iPod is coming! The iPod is coming!

Give me a break.

Just a note to Blodget, McIntyre and other fear-mongers:
If you're going to try to be dramatic about predicting the demise of satellite radio, try basing your "research and analysis" on concrete reasons - there's actually plenty available to work with.

[24/7 Wall St, Clusterstock]