Sirius gets (much needed) serious $$$$

[fredfa]

From Daily Variety:

Sirius borrowing keeps satcaster in orbit

Wed Oct 13, 5:16 PM ET
By Ben Fritz, Variety STAFF

Sirius is bringing in $321 million to keep it going until, it hopes, Howard Stern saves the day starting in 2006.

Radio satcaster closed its convertible note and stock offering Wednesday with $31 million more than expected, thanks primarily to underwriter Morgan Stanley's decision to exercise an option to purchase a $30 million allotment of notes.

Company previously expected to raise $200 million from the notes, which are due by 2011 and can be converted for stock at approximately $5.30 per share.

The other $90 million comes from an offering of 25 million new shares of stock.

Notes' value indicates investors, including Merrill Lynch, are willing to bet the addition of Stern and other big names like Eminem (news - web sites) and the National Football League to the satcaster's lineup will bring in new subscribers and push up its stock price.

Sirius stock closed at $3.74 Wednesday. Company's shares initially rose as high as $4 after the Stern deal was announced last week, but have since settled down at about 12% higher than its $3.35 price before the shock jock was signed.

New funds will help cushion Sirius' continuing losses and cover the five-year, $500 million agreement with Stern. With its most recent net loss of $137 million per quarter, the satcaster didn't have enough cash on hand to make it to January 2006, Stern's start date.

With the additional infusion, Sirius should have nearly $1 billion in reserves, based on its funds as of June 30.

"The ability for us to raise this capital is a testament to the confidence within the financial community about the success of Sirius as the satellite radio category takes off," said CEO Joseph Clayton.

 

[Scott Greczkowski]

I believe that while Sirius has stumbled out of the gate it is doing what is needed to become the #1 Satellite Radio service.

Now it is XM that just keeps stumbling and there appears to be no releaf in sight.

If it was not for all the stock that Sirius had out there, their shareprice could be as high if not higher then XM's right now.

 

[Neutron]

I'm really tempted to get some Sirius stock here shortly.

 

[minorthr]

I look forward to listening to Howard on Sirius. I just hope he comes through like they want him to. If he doesn't they are in trouble. I wish Sirius had signed O and A that way I wouldn't need 2 Sat radios.

 

[Scott Greczkowski]

My feelings of Howard on Sirius are mixed.

Part of me tells me he will be just OK and part of me says that when he hits Sirius hes going to be dull since there is nothing he can't talk about now.

Part of the fun of Howards show has been hearing him talking about taboo things without actually talking about Taboo things.

I have a feeling once he starts on Sirius instead of being cutting edge howard you will hear him talking about how in 4 years 11 months and 27 days how he will be retired from radio alltogether and how he will have lots of money.

I also feel that when he moves to Sirius at first he is going to have a lot of trouble gettiing famous guests, and I feel this is because his audience will be so small. At least with Sirius on the air now his audience is a possible 20 million plus listeners.

 

[RedHat39]

My feelings of Howard on Sirius are mixed.

Part of the fun of Howards show has been hearing him talking about taboo things without actually talking about Taboo things.

I have a feeling once he starts on Sirius instead of being cutting edge howard you will hear him talking about how in 4 years 11 months and 27 days how he will be retired from radio alltogether and how he will have lots of money.

I think you hit the nail on the head here. People tune in to these shock jocks just to see how they will push the envelope on restricted air waves. Once this restriction is lifted I think they lose appeal quickly.

I hope it all works out for Sirius. Its a lot of money they are gambling on with Stern here.