If you are confused about yesterday’s Sirius XM filing, you should be. According to the 8-K filed last night, Sirius Satellite Radio (NASDAQ: SIRI) and XM Satellite Radio (XMSR) merged yesterday! You may recall that in April of last year, Sirius and XM not only merged, but XMSR was merged with and into XM Radio Inc., and XM Satellite Radio was dissolved. You read that right, XMSR has not existed for nearly a year, and yesterday Sirius XM announced that the two companies have merged as of January 12, 2011, which if you don’t have a calender handy, was yesterday.
In looking over the filing, it is apparent to me that Sirius XM had not filed all of the necessary paperwork relating to XM debt and updated indentures earlier, which could have occurred for a multitude of reasons, including legal wranglings with XM debt holders given the change of control that had previously occurred. It may also be a prelude to more debt restructuring and/or early repurchase of certain outstanding debt that needed to be filed prior to any actions being taken on the part of company.
In reviewing the filing, I stumbled on certain filings that indicate that the S.E.C. opened an inquiry with Sirius XM regarding certain financial reporting in April of 2010, which appears to have been satisfactorily resolved as of August of 2010. As closely as I follow Sirius XM, I am embarrassed that I did not find this sooner. It is interesting to note that during that same time period, Sirius XM shares floundered and began to rise precipitously just two weeks after the last SEC communication, seen below. As it turns out, the manipulation of Sirius XM last year may have come directly from within the walls of the S.E.C. itself! ...
Great explanation, BM
Good lookin’ out, B — as for “discussing all of this in the forum tomorrow…”
It may take the rest of us a few days to digest it all — maybe we can have a Saturday morning pow wow
It never ceases to amaze me what goes on around this company and stock. Now we’ll get all the bullshit regarding public comments on whether or not they should be able to increase prices. I think there is a 6 month comment and review window ending in August if I’m not mistaken. We still have to also deal with the leasing of the spectrum which will also wind up dragging on all year. Sometimes I just want Liberty to make an offer for $ 5.00, Sirius accepts and puts us out of our misery.
Brandon, when I read the filing, it struck me that this was a bit of housekeeping related to the lower interest rates that should have replaced all the higher interest rate debts. That is, it would seem reasonable to assume that some former creditor of XMSR might have argued that somehow XMSR was overlooked in the merger process, and that those 11+ percent loans are still valid, and have not been replaced by the lower 7+ percent loans that Sirius effected after the merger.
Thus, Sirius, in order to ensure either fix or ascertain that XMSR is indeed under the merger agreement, has filed this report.
I’m not sure that’s what is going on, but it seemed to appear to be that way.
Brandon
Great article once again. Yes, the SEC in regards to Sirius and also another company called CMKM Diamonds inc. something is very fishy there in regards to the SEC.
Keep digging Brandon, keep digging and keep up the great work. The Naked Short Selling and the Wall Street counterfeiting of stocks story is soon to be told after years of cover up.
Richard