By Steve Garcia -

As previously speculated in past articles, http://www.kingofalltrades.com/author/asm610

Liberty Media (NASDAQ: LCAPA, NASDAQ:LINTA) essentially confirmed they have plans in the works to take their satellite radio interests global this past week.  Liberty Media CEO Greg Maffei answered a question after his company’s 4th Quarter Conference Call regarding Worldspace (OTC: WRSPQ) and Liberty’s acquisition efforts aimed at Worldspace assets through Bankruptcy court.  Among his comments was a statement that Worldspace has L-Band spectrum licensing worldwide, and that they were looking for a creative way to monetize Sirius XM Radio,  converting their  shares in the company  is not an option they are likely to pursue at this time.  As a matter of fact, Mr. Maffei said that Board Chairman John Malone would be firmly against that option.

Looking at the broader picture, Liberty Media has an important connection in Europe through Liberty Global (NASDAQ:LBTYA, NASDAQ:LBTYB), which has dealt intensively with licensing and programming transmission regulations with many member countries of the European Union (EU).  With Worldspace having L-Band spectrum licensing globally, and both the XM infrastructure side of Sirius XM Radio and Worldspace having come from the same technologies, it’s not a big leap to speculate that the XM side of Sirius XM is a key part of the globalization planning.  Worldspace broadcasts in the 1467-1492 MHz frequency range of the “L” band, and Worldspace’s proprietary and patented technology is coincidentally used in each XM Radio receiver.  In fact, the Worldspace Global Content and Programming department used to provide approximately 10% of the original content music programming heard in America on XM Satellite Radio. (more…)

By Relmor Demitrius -

Sirius XM Radio’s (NASDAQ:SIRI) stock price has been on a positive uptrend as of late.  Since January the stock has increased from 60 cents a share to $1.18 earlier last week, which is almost a double.  It closed Wednesday near its 52 week high, on high volume.  In fact, volume has increased since the new year began.  Volume picked up even more in late January when Sirius XM released a press release giving a few details to their upcoming Q4 report, which will be held before the market opens, on February 25, this Thursday.  A lot of journalists and analysts have given their opinions as to why the run has occurred.  Speculation is running high right now regarding this equity before its conference call, which incidentally will be on the same day Liberty Media is having their conference call as well.  Since Liberty Media purchased 40% of the company through Liberty Capital (Nasdaq:LCAPA) in February of 2009, Liberty and Sirius XM have had different conference call dates.  Combining the conference call dates has only seemed to add to this speculation.  As usual when speculation is running high, one should try to break down things to their most basic levels, and just try to look at facts, or at least angles that can be supported by facts.  Lets do that now and see if we can’t get a handle on this price jump.

Why has Sirius gone up so much in 2010?

Well, I don’t think there is an easy answer, as some writers are offering.  I think it is a combination of a few fact based occurrences, wrapped into the complexity of market psychology.  Interpreting these facts can lead to a logical conclusion of this recent price action.  In this interpretation I will go forward with one assumption.  That Sirius XM shares are in demand by institutional investors.  Although it is a strong assumption also supported with facts, it is still an assumption never the less at this time.  To buy any stock however, once should assume this to be true, first and foremost.

After Sirius XM released their Q2 results, the stock had traded in a downtrend.  Despite improving cash flow, cutting costs, and refinancing debt (including removing the Liberty loan of 15% entirely) the stock still could not gain new highs.  Volume began dropping, as the same price range was offered repeatedly throughout September through the month of December.  There was no real news during this period to drive the stock price.  Only doubt and fear seemed to linger.  As the date to trade over $1 approached, Sirius XM needs to trade over $1 for 10 straight trading days before March 15th to avoid being delisted by Nasdaq, of which they now have logged 5 straight days, and the stock seemed stuck in the 50 and 60 cent range, buyers seemed intent to wait it out, to see if the reverse split/bid price rule requirement situation resolved.  (more…)

By Relmor Demitrius

With a possible historic profitable conference call now around a week away, shares of Sirius XM Radio (Nasdaq:SIRI) are finally trading over the $1 mark for the first time in over 1 year.  This is welcome news to Sirius XM long term investors, as the chance to avoid a reverse split is now within reach.  Stock still has plenty of time to log 10 trading days over $1 before the March 15th date, even removing the need for the company to file an exception request, which Sirius XM has hinted at they would very well do if so needed. 

No specific news relating to this recent move, but a steady combination of news events has allowed reality to begin to settle in on the stock price of late.  With most EBITDA evaluations coming in way over the current trading price, any up move in this stock is not surprising.  With recent S&P corporate credit rating upgrades, Blackberry application release, and a press release from Sirius XM in early January confirming free cash flow and gains in their subscriber base, has helped move the stock in the new year. 

The stock began the year trading at 60 cents, and has never looked back yet.  Sirius XM has dramatically improved their balance sheet in 2009, so any stock gains are not unexpected, if not long over due.

Mel Karmazin, CEO of Sirius XM Radio, and Liberty Media CEO Greg Maffei (Nasdaq:LCAPA), which owns 40% of Sirius XM Radio, have confirmed reports recently of a global plan, which would include the services of Sirius XM Radio.  With recent Ford commercials citing a “global” Ford, and featuring Sirius Satellite Radio, speculation of possible additional revenues from a global venture has sparked interest in the common.  As a long term investment, regardless of recent gains, the future seems bright, and opportunities for global growth is definitely a real possibility.  Worldspace assets, which already has transmission rights in Europe, Asia, and Africa, are being controlled by Liberty Media, and a plan to move forward should be coming soon from the company.

King of All Trades Staff -

Sirius XM Radio(NASDAQ:SIRI) has received two S & P corporate credit ratings upgrades this year. In April S & P took their corporate credit rating  from CCC to CCC+, and another one in August to a B- rating.  Perception of a company’s debt load and its ability to repay that debt is vital to a company’s ability to obtain new money for refinancing existing debt for better terms, or to obtain new debt altogether.

Now this month JP Morgan (NYSE:JPM) has initiated coverage of  Sirius XM’s credit.  They have begun coverage with an over-weight rating.  Sirius XM Radio has confirmed this coverage.

This rating typically indicates the company’s debt is a reliable long term investment at this point in time.  As equities are bought and sold, so are a company’s bond issues.  It appears now that JP Morgan will cover both Sirius XM’s equity, which they have given a Neutral Rating, and now their debt as well.  JP Morgan re-initiated coverage of Sirius XM’s equity in May of 2009.

Being bullish on a company’s debt is encouraging, as the company may seek to further refinance existing debt, especially the 550 million in bonds sold in July of 2008, to facilitate the merger of the two companies, Sirius Satellite Radio, and XM Satellite Radio.  These bonds were considered “ugly financing” by investors due to the company giving lent shares along with the bonds so they could be properly hedged.  If this debt were to be refinanced with new money, the rate might come down (7%), and the lent shares (202 million against the current float) would be returned and destroyed by the company.  These shares have never counted when calculating earnings per share, but are still involved in the float.  In the Q3 quarterly report Sirius XM reported 60 million of these lent shares were returned and destroyed by the company.

Another bond issue Sirius XM might target is the other bond issue needed to facilitate the merger in July of 2008.  These 13% 770 million notes due in 2013 carry a higher interest rate, and are due sooner.  Either way, both have reasons to be targeted first, depending on managements corporate strategy.

Sirius XM was able to refinance most of its 2009 outstanding debt due to Liberty Media’s loan in February of this year.  Sirius XM’s 40% equity stake awarded to Liberty for this assistance is trading in Liberty Media’s holding company, Liberty Media Corporation Capital (NASDAQ:LCAPA).  Other tracking companies of Liberty Media include Liberty Media Corporation – Interactive (NASDAQ:LINTA), (NASDAQ:LINTB), Liberty Media Corporation – Starz, (NASDAQ:LSTZA), (NASDAQ:LSTZB), and Liberty Media Corporation Capital (NASDAQ:LCAPA), (NASDAQ:LCAPB).  Liberty also owns the controlling interest in Worldspace, Inc. (OTC:WRSPQ).

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