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Guest Message by DevFuse

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Sat Radio and Liberty Media Reach Deal


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63 replies to this topic

#1 OFFLINE   MLBurks

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Posted 17 February 2009 - 07:57 AM

The deal is done!

http://www.orbitcast...-agreement.html

Edited by MLBurks, 17 February 2009 - 08:04 AM.


...Ads Help To Support This SIte...

#2 OFFLINE   Richard King

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Posted 17 February 2009 - 08:13 AM

Liberty will loan Sirius XM Radio $280 million; $250 million of which will be funded today. The loan will bear an interest radio of 15%

I assume he meant interest rate of 15%. WOW. That's a ton of interest. But then when you are over a barrel I guess you pay it.
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#3 OFFLINE   Richard King

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Posted 17 February 2009 - 08:15 AM

Upon completion of the second phase of the Liberty investments, Sirius XM will give Liberty a total of 12.5 million shares of preferred stock convertible into 40% of the common stock of SIRI.

There's the dillution to current shareholders.
The Pump Don't Work 'cause the Vandals Took the Handles.

#4 OFFLINE   Richard King

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Posted 17 February 2009 - 08:23 AM

Under 15% annual interest Liberty doubles their money in just under 4 years, about the time that the loan comes due. When it's all done in 2012, SIRI will have paid out interest of just under 250 Million and still owe $250 Million in principle.
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#5 OFFLINE   Richard King

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Posted 17 February 2009 - 08:31 AM

DirecTv stock is getting totally slammed this morning. It has held up fairly well through everything recently. This move today has it down nearly 8% before hours. Then again, Dish is also getting slammed which surprises me.
The Pump Don't Work 'cause the Vandals Took the Handles.

#6 OFFLINE   Ken S

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Posted 17 February 2009 - 08:58 AM

Gotta give Mel some credit here...he has saved control of the company and kept them out of bankruptcy.

#7 OFFLINE   Steve615

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Posted 17 February 2009 - 08:58 AM

Here is a PR from Yahoo & AP,posted about 50 minutes ago.

http://news.yahoo.co.../sirius_liberty

Liberty Media Corp. will invest $530 million in financially struggling satellite radio company Sirius XM Radio Inc.

Steve


#8 OFFLINE   wilsonc

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Posted 17 February 2009 - 09:00 AM

Under 15% annual interest Liberty doubles their money in just under 4 years, about the time that the loan comes due. When it's all done in 2012, SIRI will have paid out interest of just under 250 Million and still owe $250 Million in principle.


How do you figure that? In using a simple interest formula, I get $150,000,000 in interest in 4 years and using a compounding interest formula, I get $187,251,526.50 in interest.

#9 OFFLINE   Steve615

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Posted 17 February 2009 - 09:13 AM

PR from Liberty Media Corp.

http://ir.libertymed...6968&highlight=

Steve


#10 OFFLINE   Steve615

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Posted 17 February 2009 - 09:16 AM

PR from Sirius XM.

http://investor.siri...eleaseID=365423

Steve


#11 OFFLINE   Richard King

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Posted 17 February 2009 - 09:18 AM

How do you figure that? In using a simple interest formula, I get $150,000,000 in interest in 4 years and using a compounding interest formula, I get $187,251,526.50 in interest.

http://en.wikipedia....wiki/Rule_of_72
I was off by a year. Still, not much difference though on a compounded basis.
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#12 OFFLINE   Tom_S

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Posted 17 February 2009 - 09:20 AM

Gotta give Mel some credit here...he has saved control of the company and kept them out of bankruptcy.


For the moment. Paying off debt with more debt with a crappy rate(for Sirius) is not necessarily great management.
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#13 OFFLINE   scott72

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Posted 17 February 2009 - 09:41 AM

Gotta give Mel some credit here...he has saved control of the company and kept them out of bankruptcy.


Yeah but they're just delaying the inevitable now. Come on, 15%?

#14 OFFLINE   scott72

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Posted 17 February 2009 - 09:48 AM

I'm glad I got locked in for my $77 for the next year already, as I don't think they're going to be as generous with deals now that they'll be around for another 3.5 yrs at least.

#15 OFFLINE   redfiver

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Posted 17 February 2009 - 10:18 AM

For the moment. Paying off debt with more debt with a crappy rate(for Sirius) is not necessarily great management.


it's not a bad idea. SiriusXM still generates tons of revenue, they just needed to restructure their near-term debt to get over the hump of startup costs. They did this why retaining control of the company so they can execute their long term plans to increase profits and shareholder value. I think Mel did a pretty good job of getting this done. Lets give him a chance to actually execute on all the plans they talked about pre-merger.
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#16 OFFLINE   hdtvfan0001

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Posted 17 February 2009 - 10:53 AM

Liberty is making money....SM is not.....if not for the 15% interest..this would be a financial debacle for Liberty.
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#17 OFFLINE   Reggie3

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Posted 17 February 2009 - 11:24 AM

Liberty is making money....SM is not.....if not for the 15% interest..this would be a financial debacle for Liberty.


and in the end will it allow Liberty to obtain the company when it defaults on the interest payments?

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#18 OFFLINE   Ken S

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Posted 17 February 2009 - 11:28 AM

For the moment. Paying off debt with more debt with a crappy rate(for Sirius) is not necessarily great management.


The other choice was going to be bankruptcy and a control fight that may have led to liquidation. Obviously 15% isn't great...but the 40% share in the company is the key to Liberty...If the company is profitable on a cash flow basis they'll have a large piece and perhaps be able to then deal for control.

#19 OFFLINE   Ken S

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Posted 17 February 2009 - 11:29 AM

Liberty is making money....SM is not.....if not for the 15% interest..this would be a financial debacle for Liberty.


They got a large piece of a company with 20M subs and $2B a year in gross income. They could end up with control for an investment of 25% of the annual gross...that could be a very good deal for Malone.

#20 OFFLINE   kwajr

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Posted 17 February 2009 - 11:48 AM

what does this do for the debt echostar bought up,did liberty just pay that off basicly.




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