Good read on what Liberty take over means to Karmazin

Discussion in 'The Howard Stern Show' started by La Flama Blanca, Jun 8, 2012.

  1. La Flama Blanca

    La Flama Blanca Well-Known Member VIP

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    Liberty makes new push for Sirius Control
    Colorado billionaire John Malone and Sirius CEO Mel Karmazin are heading for another showdown at the Federal Communications Commission (FCC). Malone's company Liberty Media (LMCA) filed a petition at the FCC on May 31 that would let it take control of a majority of seats on Sirius's board.
    Presumably, the first thing that Malone's team would do at Sirius would be to fire Karmazin. Since Karmazin's weird behavior has hurt Sirius's stock value, so his termination could send Sirius's shares up in value. Reuters noted that Liberty didn't inform Karmazin of its latest move. Although Sirius was able to file a response to Liberty's latest move on the afternoon of the 31st.
    That brief contained the intriguing revelation that Sirius and Liberty are in negotiations about transactions. That could mean that Karmazin thinks he can't stop Malone from taking control, so he is negotiating an exit from Sirius. That way he could avoid the embarrassing situation of being thrown out of the company he built.
    A Karmazin departure could be very bad for Sirius stockholders because Karmazin would presumably sell off all the Sirius stock options that he has. Karmazin reportedly has at least 32 million shares of Sirius that he could sell off. He already sold 17 million of them in May and made around $33 million from the sale.
    If Karmazin dumps the rest of his Sirius stock, he'll send share prices down perhaps to under $1 a share. That of course could be exactly what Malone wants because it would enable him to buy up Sirius on the cheap. So the fight between Malone and Karmazin could be the boardroom equivalent of a pro wrestling match. It's being staged to make both contenders look like bad asses without doing any real harm to either.
    If that wasn't bad enough Liberty plans to convert half of its preferred shares in Sirius to common stock according to Reuters. Malone's company also plans to hold a share of 32% in Sirius that seems to indicate that it plans to dump those shares right back on the market. That would drive Sirius's stock prices down even further.
    The reason Malone could undertake such a strategy would be taxes. If he could engineer his takeover of Sirius in such a way as to lose money, Liberty could write the losses off on its tax return. That would be very good for John Malone and Liberty stockholders, but bad for Sirius share values. Malone has a history of using such complicated strategies to get control of companies he wants. He used similar maneuvers at Direct TV in 2009.

    http://seekingalpha.com/article/646251-pandora-takes-huge-bite-out-of-sirius
     
  2. PI Nate

    PI Nate Disenfranchised since 1984... Gold

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    someone said it already, but I find it hilarious that wiggy and his empire is nothing more than a rich guys tax write-off...:haha:
     
  3. Nemo

    Nemo Beer Can Thick Gold

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    Howard must be pissed that he can't rape and pilfer stock holders again......allegedly
     
  4. La Flama Blanca

    La Flama Blanca Well-Known Member VIP

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    sorry if its a repost....
     
  5. NiggalissCage

    NiggalissCage Well-Known Member

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    SIRI'S average volume is 55+ million shares a day, I doubt that Mel exercising the remaining 16 million options will make the stock take any significant hit.
     
  6. harlock

    harlock ancora imparo Gold

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    some partner he turned out to be :rolleye2:
     
  7. OV

    OV Rapscallion

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    Liberty's lawyers will be going over Mr Whoresy's contract with a fine tooth comb, and actively monitoring for any past or future on-air breaches enabling them to get out from under this bad deal.
     
  8. LessMoonbeams

    LessMoonbeams New Member

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    :facepalm: Oh no not this again
     
  9. Snotty

    Snotty My Snothand be strong!!! VIP Gold

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    So I'm going to guess the common stock holder is going to unass this sinking ship like rats?