Digital Radio Central - Sponsored by TSS Radio
  DRC Home Page DRC Forums Contact Us  
 
SIRIUS Backstage Forum
 
 
 
  Sirius Satellite Radio XM Satellite Radio iTunes/iPod Slacker Pandora  
 
 
FAQ Members List Calendar Search Today's Posts Mark Forums Read  
Go Back   SIRIUS Backstage Forum > >
Visit Digital Radio Central

Notices

The Street Converse with other investors about finance, economic and investment strategies. This is also the place to discuss SIRIUS XM company news and your favorite stocks.

 
 
Thread Tools Display Modes
 
 
Old 08-02-2005, 06:31 PM   #1
FrontMed
Loyal Listener
 
Join Date: May 15, 2005
Posts: 104
FrontMed is on a distinguished road
Default $500 mln at 9-5/8%

Ouch.

$48 mln/year in interest expense.
FrontMed is offline  
 
 
Old 08-03-2005, 12:18 PM   #2
Spoons
Loyal Listener
 
Join Date: Oct 31, 2003
Posts: 188
Spoons is on a distinguished road
Default Re: $500 mln at 9-5/8%

Quote:
Originally Posted by FrontMed
Ouch.

$48 mln/year in interest expense.
How much interest expense are they buying down? In other threads, you admit you like Karmazin. Do you think Mel just nilly willy decided to take on somewhere between $0 - $48M/year in interest with no expectation to produce shareholder value from the low interest....yeah...that sounds like Mel.
Spoons is offline  
 
 
Old 08-03-2005, 12:27 PM   #3
FrontMed
Loyal Listener
 
Join Date: May 15, 2005
Posts: 104
FrontMed is on a distinguished road
Default

Quote:
How much interest expense are they buying down? In other threads, you admit you like Karmazin. Do you think Mel just nilly willy decided to take on somewhere between $0 - $48M/year in interest with no expectation to produce shareholder value from the low interest....yeah...that sounds like Mel.
This money isn't about "shareholder value".

It is about getting to CFBE. At the annual meeting, Mel said that Sirius was fully funded to CFBE in '07, and that there would be no need to return to the "public markets" for financing, and that all directors had "signed off" on the statement. At the time I proclaimed that to be untrue, as it was obvious they needed more money.

This funding MAY get them to CFBE.

I do not blame Mel for this -- he inherited what can only be described as a horrible financial situation. I think for Mel to have raised $500 mln without dilution is fantastic. The 9-5/8 is what it is -- they got the best deal they could get, and at any rate, it is better than more dilution.

Still, it adds $50 mln/year in expense and hurts.

When Clayton gave away 92% of shareholders equity to erase SIRI's debt, he said it would get us to CFBE debt-free. This, obviously, was a lie. With this offering, Sirius now has as much debt as they did before Clayton diluted (multiple times, as it turnedout).

So, now, a share of Sirius is worth about 4% as much equity in the company as it was beforehand; yet, the debt is back where it was. It is pathetic. But it isn't Mel's fault.
FrontMed is offline  
 
 
Old 08-03-2005, 12:54 PM   #4
Spoons
Loyal Listener
 
Join Date: Oct 31, 2003
Posts: 188
Spoons is on a distinguished road
Default

Why are you so adamantly definitive with all your responses? Do you not get excited about the propects of being part of a burgeoning industry where both Sirius and XM will be major superstars?

C'mon...live a little.
Spoons is offline  
 
 
Old 08-03-2005, 12:57 PM   #5
jon galt
Loyal Listener
 
Join Date: Oct 02, 2002
Posts: 247
jon galt is on a distinguished road
Default

Quote:
Originally Posted by FrontMed
Quote:
How much interest expense are they buying down? In other threads, you admit you like Karmazin. Do you think Mel just nilly willy decided to take on somewhere between $0 - $48M/year in interest with no expectation to produce shareholder value from the low interest....yeah...that sounds like Mel.
This money isn't about "shareholder value".

It is about getting to CFBE. At the annual meeting, Mel said that Sirius was fully funded to CFBE in '07, and that there would be no need to return to the "public markets" for financing, and that all directors had "signed off" on the statement. At the time I proclaimed that to be untrue, as it was obvious they needed more money.

This funding MAY get them to CFBE.

I do not blame Mel for this -- he inherited what can only be described as a horrible financial situation. I think for Mel to have raised $500 mln without dilution is fantastic. The 9-5/8 is what it is -- they got the best deal they could get, and at any rate, it is better than more dilution.

Still, it adds $50 mln/year in expense and hurts.

When Clayton gave away 92% of shareholders equity to erase SIRI's debt, he said it would get us to CFBE debt-free. This, obviously, was a lie. With this offering, Sirius now has as much debt as they did before Clayton diluted (multiple times, as it turnedout).

So, now, a share of Sirius is worth about 4% as much equity in the company as it was beforehand; yet, the debt is back where it was. It is pathetic. But it isn't Mel's fault.
Thank you for summarizing why Clayton was no good for this company.

Anyone can look like a genius when spending like mad, a real genius knows how to clean up this mess.
jon galt is offline  
 
 
Old 08-03-2005, 01:16 PM   #6
FrontMed
Loyal Listener
 
Join Date: May 15, 2005
Posts: 104
FrontMed is on a distinguished road
Default

Quote:
Thank you for summarizing why Clayton was no good for this company.

Anyone can look like a genius when spending like mad, a real genius knows how to clean up this mess.
Clayton was terrible for Sirius and his mess will persist for a long time to come. But Mel is already making good progress. If he can straigten out what he inherited he will, in fact, look like a genius.

I owned shares of Sirius and XM before most people had even heard of the concept of Satellite Radio. But it became quite apparent to me that XM's management was just hitting on all cylinders while Sirius' management was weak. Today, Sirius management is fantastic. But financially, they are a mess.

The $500 mln is something that had to happen. That Mel did this without the need for convertibles is a great accomplishment IMO. It doesn't mean that Sirius can catch XM (financially) anytime soon, and it may never happen. But it is clear they have made some progress since Clayton was fired.
FrontMed is offline  
 
 
 

Go Back   SIRIUS Backstage Forum > >


Digitalradiocentral.com




Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump


All times are GMT -5. The time now is 10:03 AM.
Powered by vBulletin® Version 3.8.11
Copyright ©2000 - 2020, vBulletin Solutions Inc.
Search Engine Optimisation provided by DragonByte SEO v2.0.39 (Pro) - vBulletin Mods & Addons Copyright © 2020 DragonByte Technologies Ltd.
All Content Copyright SIRIUS Backstage. All Rights Reserved. SIRIUS and registered trademarks are the property of SIRIUS Satellite Radio, Inc. The opinions posted on SIRIUS Backstage website and forums are those of the individual posters and/or this website and are not necessarily the opinions or positions of SIRIUS Satellite Radio, Inc.