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Old 01-11-2007, 05:38 PM   #1
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Default What would happen to our stocks if a merger occured?

Sorry for the noob question, but I don't quite understand what would occur to our stocks(current quote: $3.90) if Sirius and XM merged?
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Old 01-11-2007, 07:27 PM   #2
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Quote:
Originally Posted by Spiderguard
Sorry for the noob question, but I don't quite understand what would occur to our stocks(current quote: $3.90) if Sirius and XM merged?
Anbody's guess right now. It's dependent on the deal they negotiate, although I am still in the camp that says they can try to merge, but the FCC and/or FTC will reject approval.
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Old 01-11-2007, 07:32 PM   #3
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What would happen to our stocks if a merger occured?
 
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Generally in a merger, shares in absorbed comapnies are replaced with shares in the new/remaining company.
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Old 01-11-2007, 07:57 PM   #4
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I would think a combined company would be at least worth 130-140% of the individual caps. That makes a total market cap 13-15 Billion ( keep in mind it wasn't that long ago that Sirius was 12.5 by itself when the stock was 9) .

If hypothetically Sirius "borrowed" the 5 B to buy XM, the 1.5 billion shares of Sirius would be worth 8-10 bucks per share. If you subtract the debt ( for a low side number ) you have Siri worth between 5.50 and 7.00..

My gut says Siri would hit the 9.00 levels of a year ago.

The most impressive thing to me ( and I assume the market ) is that the combined company would go black the day of the merger.
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Old 01-11-2007, 09:30 PM   #5
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Quote:
Originally Posted by HomieG
Anbody's guess right now. It's dependent on the deal they negotiate, although I am still in the camp that says they can try to merge, but the FCC and/or FTC will reject approval.
why would FCC/FTC reject the approval?
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Old 01-11-2007, 10:05 PM   #6
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Quote:
why would FCC/FTC reject the approval?
Because it might be viewed as anti-competitive. DOJ definitely would be against that.

Moreover, when the licenses were let by FCC, it was done with the understanding that only two licensees would be let at first to allow time for these companies to get off the ground. But there is a specific reason why they said two and not one: Because they wanted competition.

They should not, and I'd guess they will not, rule to do away with competition unless it is shown that two simply cannot survive.
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Old 01-11-2007, 11:42 PM   #7
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Quote:
Originally Posted by Crashed
Because it might be viewed as anti-competitive. DOJ definitely would be against that.

Moreover, when the licenses were let by FCC, it was done with the understanding that only two licensees would be let at first to allow time for these companies to get off the ground. But there is a specific reason why they said two and not one: Because they wanted competition.

They should not, and I'd guess they will not, rule to do away with competition unless it is shown that two simply cannot survive.
-----

Well if you were going to envision a novel, it would go like this.

Allow me to predict the coming months............................

The Perform act passes and SIXM pays 5-8% more royalties.
Recordings are allowed in this concession.
The FCC blesses the merger but limits bandwidth due to consolidation.
The FTC and DOJ sign off on the merger..SIXM makes money and competes
in a market very different from the one it entered and modeled.
Consumers get tiered pricing or a price freeze.

Congress looks good. RIAA gets a nice cookie. Subs are rewarded. Performers are better paid.
Satrad survives and thrives. DOJ, FCC, and FTC promote fairness and competition.

The End,

Whiskerbiscuit.

Those who think a merger is bad for the consumer fail to consider what ( further ) degraded service and programing would be like, with higher prices . Satrad then would NOT look like satrad now.

I think Mel has been talking a rate increase up lately only to play the ( concession ) card later.

Last edited by Whiskerbiscuit; 01-11-2007 at 11:46 PM..
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Old 01-12-2007, 05:32 PM   #8
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Thanks for the replies, especially WB!
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Old 01-12-2007, 06:57 PM   #9
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Quote:
Originally Posted by Spiderguard
Thanks for the replies, especially WB!
Thank you but.... Anyone's guess. If I knew that much I wouldn't be down 6 digits plus, plus.

The ONLY thing I know for sure is that Satrad is an accepted part of our culture, is valued by the American consumer to the tune of 2.0 Billion annually, and will always be a part of the near term ( 10-15 year ) future.

I believe there is only room for one company and believe that IF a merger isn't done, or isn't approved, that Sirius would be the eventual winner.

This is why I went 100% SIRIUS as an investment in June-July 2006 despite the horrible dilution factor.

I do ( Honest to God with no spin ) see a merged SIXM at 9-13 bucks per share before 2009...and I'm holding all my now 48,495 shares for the long term, siphoning only small percentages annually.

It can be argued that if only 5 % of cars are loaded, the total subscription potential by 2013 is 35 million audio auto customers and potentially 7 million video customers. The potential for internet streaming ( WORLDWIDE ) is absolutely tremendous at I'll guess 20 million. Add to that the new Advertising power of a combined company ( this is an Ace in the Hole ).

The total revenue stream at today's pricing would be 3.8 Billion for Autos, maybe .75 billion for Video, 2.2 Billion worldwide and maybe .3-.4 billion in advertising.

You're talking 7.0 Billion bucks gross revenue potentially over 1.5 billion shares with break even at maybe 1.0 billion bucks in sales. TREMENDOUS potential. even at 35-40% margins ( which would be low IMHO ) SIXM has the potential to make 1.8-2.5 Billion bucks profit which at a 20 times ( Conservative ) multiple would price the stock at $20-25 per share. Want to make it a growth stock... then 25 times with an even higher share price.

Keep in mind this is certainly a perfect scenario..and a VERY crude model.... but feasible

Management of XM and Sirius know these numbers.

I shit you not.
Pray and be patient.

Last edited by Whiskerbiscuit; 01-12-2007 at 07:06 PM..
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Old 01-12-2007, 07:48 PM   #10
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Quote:
Originally Posted by Whiskerbiscuit
-----

Well if you were going to envision a novel, it would go like this.

Allow me to predict the coming months............................

The Perform act passes and SIXM pays 5-8% more royalties.
Recordings are allowed in this concession.
The FCC blesses the merger but limits bandwidth due to consolidation.
The FTC and DOJ sign off on the merger..SIXM makes money and competes
in a market very different from the one it entered and modeled.
Consumers get tiered pricing or a price freeze.

Congress looks good. RIAA gets a nice cookie. Subs are rewarded. Performers are better paid.
Satrad survives and thrives. DOJ, FCC, and FTC promote fairness and competition.

The End,

Whiskerbiscuit.

Those who think a merger is bad for the consumer fail to consider what ( further ) degraded service and programing would be like, with higher prices . Satrad then would NOT look like satrad now.

I think Mel has been talking a rate increase up lately only to play the ( concession ) card later.

Interesting read, but also proof that I hate fantasy and novels
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Originally Posted by Andrew-NYC: "...Just make a radio that gets both services, and there will be no need for the merger!"


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Brix Streamer Replay
XACT "Visor"
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Old 01-13-2007, 05:25 AM   #11
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I now think a merger will happen.. It's only a matter of time, but my personal opinion is fine, let it happen, one sat radio company is better then none. Hopefully when the merge they'll use their heads and not drive subs away in droves. Combine the sports and music, offer tier pricing, and I'll be happy.
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Old 01-13-2007, 07:23 AM   #12
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A merger will not happen because both companies are operating on deficits where one pays with their own stock while the other pays with cash. If a merger were to happen, then the deficits on both sides would be combined and the merged company would have to take care of the larger deficit if there are things on each side that would offset part of the deficit. Also, it has been mentioned many times, but there are some people that are ignoring the reality, it would not be approved by the FCC, FTC and DOJ because they would see this as a monopoly on satellite radio since there are no other companies that handle satellite radio by transmission and subscription. The best way to find out how the FCC, FTC, and DOJ approve or not approve any merger is to contact them directly to find out their guidelines and specifically ask them about satellite radio.

Last edited by hieian; 01-13-2007 at 07:33 AM..
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Old 01-13-2007, 08:21 AM   #13
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Quote:
it would not be approved by the FCC, FTC and DOJ because they would see this as a monopoly on satellite radio since there are no other companies that handle satellite radio
Thats a bogus argument. There's plenty of competition in the radio, music, news/weather field. Ipods, internet radio, AM/FM, HD radio, etc.. Don't look to the failed merger between Dish and DirecTV for guidance. It's apples and oranges. There almost no competition in the TV market, there's plenty in the radio field.
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Old 01-13-2007, 08:25 AM   #14
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Quote:
Originally Posted by Satradioman
Don't look to the failed merger between Dish and DirecTV for guidance. It's apples and oranges. There almost no competition in the TV market, there's plenty in the radio field.
I tend to disagree with that, but was wondering if you could explain the last sentence some more. Are DVD's, tapes, movies, OnDemand and PPV channels not competition to the TV market? Is cable TV not competition to broadcast/OTA and satellite TV?
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Originally Posted by Andrew-NYC: "...Just make a radio that gets both services, and there will be no need for the merger!"


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Old 01-13-2007, 09:08 AM   #15
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Quote:
Originally Posted by Satradioman
Thats a bogus argument. There's plenty of competition in the radio, music, news/weather field. Ipods, internet radio, AM/FM, HD radio, etc.. Don't look to the failed merger between Dish and DirecTV for guidance. It's apples and oranges. There almost no competition in the TV market, there's plenty in the radio field.
If you bothered to read the entire statement, it is not an argument since that response about those different agencies have been posted here and elsewhere. Sure those other things are in competition with satellite radio, but when it comes to having only 2 satellite radio companies that deal with transmission and subscription of the same material as terrestrial radio without other satellite radio companies, it would be seen as a monopoly of satellite radio. As far as no competition in the TV market, I would agree with HomieG because those other things that you have mentioned as competition for satellite radio would also apply to the TV market. I am typing this response on a computer instead of watching TV.

Last edited by hieian; 01-13-2007 at 12:40 PM..
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