Gearfuse

The AP is reporting that Liberty Media, who had previously expressed interest in Sirius-XM, has signed a deal where it’ll invest $350 million in the failing satellite radio company. This comes right in the nick of time; Sirius had $175 million in bond payments due today, which would have no doubt sent the company into Chapter 11 bankruptcy. Instead, Liberty Media is going to get 12.5 million shares of convertible preferred stock, worth about 40 percent of the company’s common stock. Additionally, two seats on the board will go to Liberty Media, giving it quite a bit of control over the company.

As for current CEO Mel Karmazin, it’s only a matter of time before he’s outta there. Since the merger between Sirius and XM, Karmazin has failed to have the company turn a profit, leading to a lack of investor confidence and a couple close scares. Let’s hope that Liberty Media can stop Sirius-XM from bleeding cash; especially from that $500 million Howard Stern deal. Shareholders, you can breathe a little easier today.

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The New York Times tends to be a pretty reputable news source. So when I read last night that XM-Sirius Satellite Radio is probably going to file for bankruptcy, I felt like absolute shit. Why? Because I recently bought some shares of the company hoping it’d recover by 2011. Apparently CEO Mel Karmazin just can’t get the company to turn a profit and the debt is piling up. Combined with pissed off shareholders like myself who are fuming over a botched EchoStar sale, XM-Sirius is probably going to go under in the next two years.

The company is preparing to file for Chapter 11 bankruptcy soon. R.I.P. XM-Sirius.

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So you’ve got the debt-riddled satellite radio monopoly known as Sirius-XM and you’ve got veteran satellite pioneer EchoStar. EchoStar is trying to buy Sirius-XM but the company keeps rebuffing its offer. As a shareholder, I believe this is not in our best interests. Sirius-XM has yet to turn a profit and while its subscriber base is increasing, short-term money solutions are becoming a key issue. Some people, like the blog Orbitcast, seem to think that the solution is a Democrat-run FCC. I think we just need more lax anti-trust laws.

Do you use Sirius-XM? Worried about losing your Howard Stern? Chip in and let us know what you think is the right thing for Sirius-XM to do.

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