With its stock trading under $1.5 on many days, Sirius (NASDAQ: SIRI) shareholders don't have much hope to make money. But, whatever hope is left may be about to go away.
EchoStar (NASDAQ: DISH) is buying up the maturing debt of Sirius, and probably getting a good deal on the distressed paper. According to The Wall Street Journal, "EchoStar, has recently acquired part of a $300 million tranche of Sirius debt that matures on Feb. 17."
DISH may continue to buy SIRI debt and use the move as a takeover method. It is not clear why the money-losing satellite radio company has a suitor, but that may beside the point.
Buying debt is a novel way to get around shareholder approval of an acquisition and may even take the SIRI board out of the picture. Once the debt is due and SIRI is in default the firm does not have a lot of options.
Sirius stock has been heading toward zero. It may get there in the next few weeks.
Douglas A. McIntyre is an editor at 24/7 Wall St.
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Reader Comments (Page 1 of 1)
2-05-2009 @ 10:30AM
greg said...
Wondering where SIRI is headed from here? Find out by following the link below and entering a ticker for your free stock analysis.
http://tinyurl.com/8lvk2m
2-05-2009 @ 10:53AM
George D said...
Wow! a post made at 4:08 AM -- either you are the hardest workin' man in finance, Douglas, or a bigtime SiriusXM shorter. Grain-o-salt on this opinion folks.