Sirius XM (NASDAQ: SIRI) has been fighting off an attempt by EchoStar (NASDAQ: DISH) to take over the troubled satellite radio firm. Now Sirius has turned to another company in the hopes of avoiding a hostile buy-out. According to The Wall Street Journal, Liberty Media may be the savior. "The talks set the stage for a battle between the leading U.S. satellite-television providers -- Liberty-controlled DirectTV Group Inc. and Mr. Ergen's Dish Network Corp. -- for control of the country's sole satellite-radio operator."
There may be a temptation for Sirius shareholders to think that if Liberty steps in, they might salvage some of their investment. SIRI shares have fallen from over $3 to under 6 cents in the last year. EchoStar's plan to buy up Sirius debt and perhaps put the company into Chapter 11 might have killed the last piece of value that common shareholders have.
But, there is no good conclusion for stockholders. If Liberty does get control of Sirius, management may keep their jobs. The business model of expanding subscriptions into more and more cars might survive. But, the issue of the Sirius long-term debt of over $2 billion won't go away.
If Liberty steps in, it will not share the benefits of the investment with anyone else. Common shareholders are still out of luck.
Douglas A. McIntyre is an editor at 24/7 Wall St.
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Reader Comments (Page 1 of 1)
2-12-2009 @ 10:44AM
gefpep said...
The greatest asset of this Co. is Satellite Weather. This technology, used by the Marine Industry, would be a boon to the trucking industry. Knowing where and how bad weather patterns are, in addition to an improved traffic reporting, would allow truckers to more efficiently manage their travel and down time. This would reduce Carbon emmisions and improve traffic safety. Would not want to see this technology go to waste.
2-16-2009 @ 9:00AM
frankie said...
wow. you really have a hard on for SIRI's demise. what gives? my assumption is that you really don't care about SIRI all that much, but you cobble together these "articles" so you can get hits by using the symbol SIRI (we all know that SIRI gets the most clicks). clever! well, not really......