Last night, several media sources said Sirius XM (NASDAQ: SIRI) was going to file for Chapter 11. True or false? The fact is, the media did not know, but the stock could sell off sharply this morning on the rumor.
According to The New York Times, "A bankruptcy would make Sirius XM one of the largest casualties of the credit squeeze." So, the paper has an entire article on the "possibility" that Sirius shareholders will be wiped out today or tomorrow.
The stories about Sirius, which hit the wires all night long, did not have one hard piece of evidence about what would happen to the company today. Yet none of the major media want to be beaten to the story by their competitors, so they are willing to run vague pieces about what might happen.
Sirius may have most of its debt bought by EchoStar (NASDAQ: DISH). EchoStar may not want to take the satellite radio company through a bankruptcy. DISH may not want to spend all that time in court and have key decisions made by a judge. Was the fact in the headlines today? No.
Douglas A. McIntyre is an editor at 24/7 Wall St.
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Reader Comments (Page 1 of 1)
2-11-2009 @ 9:25AM
Dan Barnett said...
Didn't something like this hit United Airlines about a year ago?
Is this part of the idea that an individual investor tries to move ahead of the market, (hopefully) without running afoul of the "insider information" laws? c.f Martha Stewart.
I also seem to remember someone commenting on this site that he would short a stock & then go and start rumors of bad news at various sites. As I recall he claimed to make $600g the year previous.