As you may have heard, satellite radio conglomerate Sirius XM has some money problems due to the fact that the economy sucks and nobody is buying cars and, oh yeah, they never, ever made money ever in the first place. And what do you do when you when you are faced with bankruptcy? Why, you borrow more money at terrible loan rates, of course!
Sirius XM cried poormouth and Liberty Media (the clueless owners of my beloved Atlanta Braves) stepped up to the plate for them, throwing $350 million into Sirius XM’s Sarlacc Pit. The deetz: Liberty Media gets 40% of the company and hooks Sirius XM for a loan with 15% interest. Sirius XM, meanwhile, pays off $172 million in debt due today and avoids bankruptcy at the last minute (today!). Wait, 40%… that’s a lot, ain’t it? Was this some sort of secret takover? Looks like it. John Malone and Greg Maffei from Liberty are likely to join the company’s board and, for all intents and purposes, control Sirius XM now. Sirius XM’s stock has gone up as much as 115% during the course of today, although one should expect that from a company whose share price is just above the 10-cent mark.
And my dad gets to keep his Margaritaville! It’s a win for everyone. Yep, smooth sailing ahead.
Sirius XM Saved By Liberty [Silicon Valley Insider]