Sirius XM (NASDAQ: SIRI) jumped up on news that EchoStar (NYSE: DISH) was buying its debt, probably to try to get control of the satellite radio company. When it did not look like a deal was imminent, the stock backed off.
Trading at 11 cents per share, SIRI will probably make another run. It may not last long, but on a percentage basis, it should be a good ride.
Some experts are beginning to think that EchoStar will make another debt purchase and that it has no interest in putting Sirius into bankruptcy. "It'd be better for him not to put it in bankruptcy and to buy it as a going concern," said Jake Newman, analyst at CreditSights. There is also a good chance that EchoStar will have to buy most of the Sirius debt coming due this year and next.
If EchoStar is serious about getting Sirius, the next announcement about it moving further along in debt purchases should offer some encouragement to investors.
Where the stock trades now, holders have already given up. It won't take more than modest news to create a brief recovery.
Douglas A. McIntyre is an editor at 24/7 Wall St.
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Reader Comments (Page 1 of 1)
2-10-2009 @ 3:02PM
BChargers said...
""It'd be better for him not to put it in bankruptcy and to buy it as a going concern," said Jake Newman,"
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This is false. it WOULD be better for Ergen to put SIRI into bankruptcy where it would be far easier for him to gain control.
2-11-2009 @ 7:54AM
John Doe said...
>>Trading at 11 cents per share, SIRI will probably make another run. It may not last long, but on a percentage basis, it should be a good ride.
Yeah - maybe it will open at .02 a share today.
Lol @ Market Cap