Your Report Card Is Your Stock Price? Guess Sirius Is Making Straight $.13's…

Your report card is your stock price.”

– Sirius XM CEO Mel Karmazin, August 2007

In November of 2007, shares in Sirius XM (SIRI) were trading at $3.94. Today they’re at $.13. Suffice to say, the company’s shareholder meeting tomorrow will be a critical one for the struggling satellite radio outfit and for CEO Mel Karmazin, who’s presided over its more than 85 percent decline in–some might say destruction of–shareholder value. And now, with $1 billion in debt coming due in 2009, and Sirius in serious danger of being delisted, Karmazin faces the uniquely difficult task of convincing ornery shareholders to back a reverse stock-split measure. If they do, the company will be able to put off that Nasdaq delisting notice that’s clearly been in the offing for some time now.

But it’s going to be a tough sell. Already, a number of investors are vehemently opposing the idea, among them, the Save Sirius coalition, which is pursuing legal action against the satellite broadcaster and its leadership for alleged violation of fiduciary duties.

Jeff Stevens

Mel has done everthing he has said he would do. Hartleib would have been better off if he went after Goldman Sachs analyst Mark Wienkes who downgraded the stock until it reached .17 while his firm traded the stock (ie Short it), and while they owned most of the debt coming due, a clear conflict of interest IMO.
Also see what they did to broadcasting stocks Entravision and Entercom. Mel can’t rig a stock price!
Leroy Clifton

It’s Mels problem that has our stock in it’s dire position AND NEEDS TO BE FIRED. NO on Slpit NO on board of directors thats what we need. also NO on additional STOCK.
Jeff Stevens

Firing Mel makes you feel batter but doesn’t solve anything (re:YHOO). Mel is growing subscribers top line revenue and he beat Q3 bottom line because Subscriber acquisition costs are lower with fewer car sales (payments to GM).
The analysts gave zero credit for that.
That will occur in Q4 as well.
SIRI is very close to break even. It will depend on severance costs.
The new stock will probably go to debt holders like Goldman Sachs and to refinance the May debt. This is all better than chapter 11.
http://www.weseed.com Carlos Portocarrero

I always thought that if the car companies did badly, so would Sirius. Especially when it comes to acquiring new customers—isn’t that how most people get exposed to satellite radio for the first time?

Maybe I’m wrong on this…
Jeff Stevens

Yes, Sirus is dependent on auto sales for new customers.
However new customers are given free service up to a year before they pay subscription revenue. Poor auto sales in Q4 2008 affects top line revenue in Q4 2009. Sirus pays Auto companies a fee for adding the radio. There will still be growth. Today announced an improvement of 100 million for 2008 compared to estimates.
EBITDA of ($32 million) for Q4.
Q3 was ($37 Million).
http://digitaldaily.allthingsd.com John Paczkowski

Is it even possible to oust Karmazin given he has the support of instutional shareholders?

Your Report Card Is Your Stock Price? Guess Sirius Is Making Straight $.13's…

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