A Bankruptcy Filing, Mel? Surely You Can’t Be Sirius…
by John Paczkowski
Posted on February 10, 2009 at 5:20 PM PT
Looks like Mel Karmazin, CEO of embattled satellite broadcaster Sirius XM, would rather file for bankruptcy than yield partial control of the company to Charlie Ergen and Echostar (SATS).
“People close to the company” tell the New York Times that Sirius may be days away from filing Chapter 11.
From the Times:
Sirius has been working with the restructuring expert Joseph A. Bondi of Alvarez & Marsal and the bankruptcy lawyer Mark Thompson of Simpson, Thatcher & Bartlett to help prepare a Chapter 11 filing, people close to the company said. The documents and analysis are close to being completed and a filing could come within days, according to a person familiar with the matter.”
Or not. A bankruptcy filing would wipe out shareholders, among them Karmazin, who invested $2.7 million in Sirius (SIRI) stock last summer. And with Ergen’s offer reportedly still on the table, it would expose Sirius’s management to shareholder lawsuits. So perhaps the threat of a possible bankruptcy filing made through the media is a bluff to force Ergen’s hand. After all, just because the company has hired bankruptcy and restructuring advisers doesn’t necessarily mean a filing is imminent.
Sirius shares, which had been trading a bit higher than their typical 12 cents a share, have fallen deep into the mud on the news. They’re down more than 40 percent to six cents as I write this.
A nasty price for shareholders to pay if this is truly a high-stakes game of chicken….
PREVIOUSLY:
- Sirius Rolls Out New 24 Hour Investor Keening Channel
- Sirius Debt Problems? Call EchoStar! No Upfront Fees!
- Sirius XM: The Beginning of the End or the End of the Beginning?
- Your Report Card Is Your Stock Price? Guess Sirius Is Making Straight $.13’s…
- Trade You 77 shares of SIRI for 1 Month of “Sirius Everything”
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Comments
mel messed up…plain and simple
too much debt
not enough cash flow
that’s broadcasting 101, which mel seemed to forget
maybe he can ask howard stern for a loan
Posted by Sam Harrison at February 10th, 2009 at 5:57 pmAnother failed business? Why shouldn’t the government bail them out and give free radios to everyone?
Seriously (no pun intended) it makes as much sense and today’s other headlines.
Posted by Mac Beach at February 10th, 2009 at 8:24 pmMaybe Stern’s loan will consist of shares of Sirius
While I’ve admired the technology, I’ve always had the feeling it came on the marketplace too late. In an era of easy downloads, satellite radio isn’t a “must have.”
Posted by Ken Okel at February 11th, 2009 at 3:49 am