Sirius XM Radio Inc. raised its fiscal 2009 outlook and expects to achieve over $350 million in adjusted income. This is an increase from the Company's previous outlook of over $300 million in fiscal 2009 adjusted income provided on March 10, 2009.
"NEW YORK (AP) -- Standard & Poor's Ratings Service bumped up the corporate credit rating on satellite radio company Sirius XM Radio Inc. one notch on Tuesday, based on a recent $530 million bailout by Liberty Media Corp."
"Sirius XM Radio Inc.'s shareholders approved proposals to issue up to 3.5 billion more shares and enact a reverse stock split, an effort by the satellite-radio company to pay down debt and shore up its battered stock price."
Sirius will have about $1B in debt due when 2009 rolls around. An analyst from Barclays Capital said that Sirius would have to raise between $750 to $800M to cover the debt costs. Given the state of the credit markets, if Sirius cannot raise enough money, it may be forced to offer more stock which would further dilute shares.
Sirius and XM completed their merger to form Sirius XM Radio Inc. The new company has about 18.6M subscribers and the merger is expected to save the new company $400M through lower operation costs.
FCC agreed in principal to vote to allow the merger of XM and Sirius.
The FCC has delayed making a decision on the Sirius and XM merger until the end of second quarter 2008. The dormant, yet important, proposed $5 billion merger of Sirius Satellite Radio Inc. (SIRI) and XM Satellite Radio Holdings Inc. (XMSR) cleared a major hurdle, as Federal Communication Commission Chairman Kevin Martin backed the merger - with stipulations.Concessions Martin recommended include: the stations turn over 24 channels to noncommercial and minority programming as well as a three-year freeze on prices and packages. Both satellite stations have already accepted Martin’s conditions.“As I’ve indicated before, this is an unusual situation,” Martin said in a statement. “I am recommending that with the voluntary commitments they (the companies) have offered, on balance, this transaction would be in the public interest.”
This activity could give legs to the theory that shorts are covering. One popular arb play if you felt the merger would pass was to go long XM and short SIRI.
The Draft Order might have also been issued, and that there is speculation that we could begin to know commissioner stances by mid next week.
The Federal Communications Commission Chairman said he recommended to the FCC that the Sirius - XM merger be approved.
Sirius released its 3Q '07 earnings results on October 30th. The company reported a decrease in net loss and increased EPS during this period. Executives also expressed confidence that the merger with XM would be approved an closed by year-end.
UBS downgraded its rating for Sirius Satellite Radio Inc. from ‘Buy’ to ‘Neutral’ on account of uncertainty about the company’s future subscriber growth. This caused the company’s share price to trade lower in the early trading hours. Sirius is expected to merge with XM Satellite Radio once regulatory approval is received. Revenue growth will depend on subscriber growth in the future as the two companies have agreed to put a cap on their prices. However, subscriber growth of XM has declined, which is expected to have a negative impact on revenue growth.
Sirius announces a decrease in its quarterly loss in the first quarter of 2007.
Former Attorney General openly criticizes Sirius and XM's proposed merger and announces his plans to lobby against the merger.
Talk of a potential merger between Sirius and XM is validated when the two companies announce their proposed merger.