# Survey Says.....



## Richard King (Mar 25, 2002)

http://www.thestreet.com/story/1060...html?puc=_mdb_html_pla4&cm_ven=EMAIL_mdb_html

Poll Says Sirius XM Headed For Bankruptcy



> Earlier in the week, an Audit Integrity study highlighted a few companies that it said were mathematically most poised for bankruptcy in the coming year.....
> 
> But in first place, with 34% of the vote, was Sirius XM Radio(SIRI Quote).


More....


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## shedberg (Jan 20, 2007)

That would not be good for me. I love my Sirius! I cannot stand to listen to the radio anymore. I guess if they stop transmitting, I'll fork over some money to hook my iPod to my radio.


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## BattleZone (Nov 13, 2007)

IMO, they'd most likely be purchased by another company, who would (IM) likely drop support for one of the two services and push everyone to the other, likely with an equipment discount for existing subscribers of the killed-off service.

The real problem with the whole thing is that there wasn't enough money to support two companies, especially with non-compatible equipment.

The concept overall has been proven to be able to make money, but people want to know that if they buy a car, it will support "satellite radio" and not just one or the other brand, especially if their other car has the opposite brand.

I'd guess that with a bankruptcy, another company could buy SiriusXM and not be encumbered by the old requirements to support both, which was clearly a huge mistake from the get-go.

I see XM vs. Sirius much like HD-DVD vs. Blu-Ray: people want one standard that they can understand, and having two similar-but-incompatible "standards" ultimately erodes your pool of potential subscribers. I can say with certainty that it has prevented ME and many people I know from subscribing...


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## Dolly (Jan 30, 2007)

I read that study, but didn't see the survey. It is interesting because the study said SiriusXM had a 9% chance of bankruptcy. In this economic time I would say 9% wasn't bad at all, but then in the survey 34% think they will go into bankruptcy. 9% to 34% is a jump up for sure, but I think most of that is due to the fact that the Public Relations for SiriusXM hasn't been good at all. And SiriusXM hasn't done itself any good by raising rates and keeping the channel changes a deep dark secret until the day the changes happened! SiriusXM has a bad public perception for sure, but the really sad/bad part of that is they don't seems to be even trying to change that perception!


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## armophob (Nov 13, 2006)

shedberg said:


> That would not be good for me. I love my Sirius! I cannot stand to listen to the radio anymore. I guess if they stop transmitting, I'll fork over some money to hook my iPod to my radio.


Music radio sucks. Try wzzr out of Florida. All talk. As I understand it, you can get it on your phone thru I heart radio now. Go here for the site and click listen live. 
Been listening for 17 years now. I could not have survived my job without it.


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## rudeney (May 28, 2007)

The study that indicated 9% was conducted by experts. The survey that came up with 34% was an unofficial reader poll. Regardless, if bankruptcy is in the future, it will likely be the typical corporate restructuring that will get them out of their contracts and financial obligations. We'll still have satellite radio, but it may be without some of the high-priced talent they have now. And that would not hurt my feelings - I have it for the music anyhow.


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## cartrivision (Jul 25, 2007)

Richard King said:


> http://www.thestreet.com/story/1060...html?puc=_mdb_html_pla4&cm_ven=EMAIL_mdb_html
> 
> Poll Says Sirius XM Headed For Bankruptcy
> 
> More....


Sirius XM may or may not be headed for bankrupcy, but one thing's for sure... a poll of a bunch of readers of a financial blog is not a good indicator of whether or not a company is likely to go into bankrupcy.


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## cartrivision (Jul 25, 2007)

BattleZone said:


> I'd guess that with a bankruptcy, another company could buy SiriusXM and not be encumbered by the old requirements to support both, which was clearly a huge mistake from the get-go.


That makes no sense. The main requirement to support both systems comes from the fact that it makes the most financial sense. It wasn't a mistake... it was the best option. Not doing so would require either replacing the radios of half of their subscribers or losing that half of their subscriber base, so maintaining both systems is a net plus for the company rather than an encumbrance.

Whether you are the current owner or a buyer in bankruptcy, dumping half of the paying subscribers base would be foolish, and the alternative of replacing the radios of 10 million subscribers instead of just dumping them would easily exceed one billion dollars.

Then there's the fact that without maintaining both systems, they would effectively lose the use of half the bandwidth that they own unless they launched new satellites into service that could broadcast on the entire spectrum that they own using either one of the two current systems (XM or Sirius), and even then none of the current radios could receive anything more than half of that broadcast spectrum... that would require new radios too.

The fact is that a buyer in bankruptcy would then be free of the billions of dollars of debt load that the current owner carries, and the two separate systems would each be a profit producing cash cow, and therefore they would both be retained and run in much the same way as they are today.


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## Herdfan (Mar 18, 2006)

A couple of thoughts. One is they have way too much debt. Bankruptcy could fix that, but the stockholders get screwed. I think they would be able to operate going forward without the debt load.

Two, there was an article this morning about companies that may be delisted for having a stock price below $1. SIRI was on that list and is currently around 60 cents. They need to do something.


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## Richard King (Mar 25, 2002)

I suspect there is a 1 for 10 (or 20, or 30) reverse split in the near future.


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## BattleZone (Nov 13, 2007)

cartrivision said:


> That makes no sense. The main requirement to support both systems comes from the fact that it makes the most financial sense.
> 
> Then there's the fact that without maintaining both systems, they would effectively lose the use of half the bandwidth that they own unless they launched new satellites into service that could broadcast on the entire spectrum that they own using either one of the two current systems (XM or Sirius), and even then none of the current radios could receive anything more than half of that broadcast spectrum... that would require new radios too.


I assure you that sooner or later, one of the two systems will be decommissioned.

Given the large amount of duplication, the bandwidth doesn't do much good. What needs to happen is for the company to duplicate the channels on both systems, then announce a date for several years in the future where one service will be discontinued. All new sales should go to the other service. 6 months before the cut-over, subscribers of the soon-to-be-obsolete service should get a $100-off (or 50% off, or something) coupon for the other type of radio when they turn in their old one. Folks with factory radios should get a similar credit. Yes, it will cost some money, but by driving all new sales to the "winning" system NOW, those costs 3 years from now will be reduced by a good chunk. And people who have been holding out getting sat radio can buy with confidence that their radio won't be obsolete.

You will lose some subscribers, who won't like the changes or will resent losing their favored service, but that will be made up for by new subscribers who can finally get off the fence, and that turn-over will reduce the amount of replacement radios needed when the other service is shut off.


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## rudeney (May 28, 2007)

BattleZone said:


> I assure you that sooner or later, one of the two systems will be decommissioned.


Why? With satellites already in the sky, and transmission equipment already on the ground, what does it really cost them to maintain two systems? My guess is the paid "talent" like Howard and Martha and feeds from NFL, NBA, and ESPN are the big costs.


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## BattleZone (Nov 13, 2007)

But that's the point: SiriusXM is now having to pay for competing talents, yet can only offer those talents to one half of their subscribers. It's confusing and frustrating for many customers that they can't get all of the shows they like, because some are on one service and some on another. And many of those high-dollar deals were due to the two companies competing for the talent.

Forget about the past for a minute. This is now ONE company that is running two different, incompatible services. That makes no sense. IMO, they are losing a lot of potential subscribers due to this confusion, much like the Blu-Ray/HD-DVD format war caused many customers to stay on the fence until it was decided.

SXM needs those new subscribers; they're LOSING subscribers right now, and that's not good. I believe that my plan would gain them a lot of new subscribers, while the current plan will keep driving them away.


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## rudeney (May 28, 2007)

BattleZone said:


> But that's the point: SiriusXM is now having to pay for competing talents, yet can only offer those talents to one half of their subscribers.
> 
> It's confusing and frustrating for many customers that they can't get all of the shows they like, because some are on one service and some on another.


Why? Is there some reason why they can't offer all the same programming on both services? If the problem is one of bandwidth, then that's an even stronger argument against decommissioning one system. My guess is that they don't mirror the programming because they want to charge more for the "best of" packages.



> And many of those high-dollar deals were due to the two companies competing for the talent.


I agree, but now that they are one, there should be no contractual reason they can't put all shows on both services. In fact, with less competition, it seems they might need to renegotiation some contracts.



> Forget about the past for a minute. This is now ONE company that is running two different, incompatible services. That makes no sense.


My argument is that the equipment is not at the heart of the confusion. SO, they have two different satellites to broadcast from and two different equipment types to receive it. All they have to do is mirror the broadcasts, even using the same channel numbers, and it's a no-brainer.



> IMO, they are losing a lot of potential subscribers due to this confusion, much like the Blu-Ray/HD-DVD format war caused many customers to stay on the fence until it was decided.


Again, if they would just mirror both services, there would be no confusion.



> SXM needs those new subscribers; they're LOSING subscribers right now, and that's not good. I believe that my plan would gain them a lot of new subscribers, while the current plan will keep driving them away.


They are losing subscribers because they changed too much too quickly *and* broke a lot of promises. Remember how the merger was supposed to be better by giving us more content for a lower price? Well, the _same_ content now costs more than it did before, but we also lost some channels and DJ's in the merge, and in order to get the other service's additional content, it costs _even more_.

Honestly, I believe the best thing SWM could do is mirror the services. Stop charging for the extras, drop any talent that's just way too expensive (yes, this might cost some subs, but it would gain cash), and then start working on the next generation of programming.


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## paulman182 (Aug 4, 2006)

They would have to drop some channels in order to be able to mirror them all.


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## rudeney (May 28, 2007)

paulman182 said:


> They would have to drop some channels in order to be able to mirror them all.


Which makes for a good argument against decommissioning one of the two systems.


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## gregjones (Sep 20, 2007)

paulman182 said:


> They would have to drop some channels in order to be able to mirror them all.


Dropping some of the channels is a better option than dropping all of the channels (bankruptcy).


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## rudeney (May 28, 2007)

I don't believe that bankruptcy would mean the end to SXM. I'm not saying it would be a good thing, but discharging debt and reorganizing might allow "someone" to keep the systems running and be profitable. Of course those of us with lifetime subscriptions might be out of luck, but at least we would still be able to get service.


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## Ken S (Feb 13, 2007)

SXM has a big problem...Howard Stern's contract is up in about a year. If they can't re-sign him they're looking at losing a significant chunk of their subscriber base. It's going to be very hard for their stock to move much until that issue is resolved.


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## rudeney (May 28, 2007)

But where is Howard going to go? There is no other place to make money broadcasting his "banned by the FCC" radio show. I believe SXM is in a decent position to negotiate with him. Also, I have no idea how many subs would jump ship if he did leave. I am sure there are some, but I can't believe it's "significant".


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## Richard King (Mar 25, 2002)

Ken S said:


> SXM has a big problem...Howard Stern's contract is up in about a year. If they can't re-sign him they're looking at losing a significant chunk of their subscriber base. It's going to be very hard for their stock to move much until that issue is resolved.


Actually, it could be the best thing to happen to them. If those hard core fans who leave aren't enough to more than pay his totally rediculous salary SMX wins. I think they would win BIG.


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## Paul Secic (Dec 16, 2003)

Dolly said:


> I read that study, but didn't see the survey. It is interesting because the study said SiriusXM had a 9% chance of bankruptcy. In this economic time I would say 9% wasn't bad at all, but then in the survey 34% think they will go into bankruptcy. 9% to 34% is a jump up for sure, but I think most of that is due to the fact that the Public Relations for SiriusXM hasn't been good at all. And SiriusXM hasn't done itself any good by raising rates and keeping the channel changes a deep dark secret until the day the changes happened! SiriusXM has a bad public perception for sure, but the really sad/bad part of that is they don't seems to be even trying to change that perception!


I wouldn't buy a subscription. I get SiriusXM on Dish and I like it.


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## rudeney (May 28, 2007)

Paul Secic said:


> I wouldn't buy a subscription. I get SiriusXM on Dish and I like it.


But you can't listen to it in your car that way!


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## Shades228 (Mar 18, 2008)

rudeney said:


> But where is Howard going to go? There is no other place to make money broadcasting his "banned by the FCC" radio show. I believe SXM is in a decent position to negotiate with him. Also, I have no idea how many subs would jump ship if he did leave. I am sure there are some, but I can't believe it's "significant".


It would be huge actually. I always thought one of the stupidest things they did was pay him so much and set a precedence for pricing on future contracts. However once I did some reading it was clear that they easily made that up.


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## Ken S (Feb 13, 2007)

Howard may retire. He has also stated that terrestrial radio has made constant offers for him to come back.

Sirius and XM can't survive without exclusive content. The music they play is easily replicated on standard radio, digital music players and services like Slacker and Pandora (which cost substantially less).

As for the size of Howards's contract. Sirius announced that they would need him to bring 1 million subs to their service to break even. The estimates are that he brought over 6 million subscribers and about 12 million listeners (Sirius believes for every subscription they get two listeners).

I understand there are people that don't like Howard Stern...nothing wrong with that, but to deny the size of the audience he has brought to satellite radio is just foolish.

Other than some sports packages what other exclusive content does SXM have that draws people in? SiriusXM needs Howard Stern and they need to develop other exclusive programs/hosts like him to survive in their present form.


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## Paul Secic (Dec 16, 2003)

rudeney said:


> But you can't listen to it in your car that way!


I'm in a wheelchair and I don't drive.


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## rudeney (May 28, 2007)

Paul Secic said:


> I'm in a wheelchair and I don't drive.


If I did not drive, then I probably would not have Sirius, either. That's where 90% of my radio listening occurs. I did used to listen to it at work, but now I'm in a different office without reception. I sometimes listen at home when I am working around the house or in the backyard, but I guess I could do that through DirecTV (although using my SUB-X1 boombox is very convenient). The only other place is at the beach condo (either at the pool or on the beach), but I don't think that would justify the cost of a subscription.


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## gregjones (Sep 20, 2007)

After years as an XM subscriber and recently a SiriusXM Premium Online subscriber (iPhone app), I finally called it quits. I love satellite radio. I have had a number of jobs with long commutes and got a lot of value out of commercial-free (or commercial-light) music, talk, news, etc.

Lately I have paid more and more for less and less actual music. I hate moving to DJs. I hate the extra charges. Even though I am a huge fan of satellite radio, there are no good options left for commercial-free music. I am sure a number of people feel the same way. This is leading a number of people to expect SiriusXM to fail miserably.


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## Ken S (Feb 13, 2007)

gregjones said:


> After years as an XM subscriber and recently a SiriusXM Premium Online subscriber (iPhone app), I finally called it quits. I love satellite radio. I have had a number of jobs with long commutes and got a lot of value out of commercial-free (or commercial-light) music, talk, news, etc.
> 
> Lately I have paid more and more for less and less actual music. I hate moving to DJs. I hate the extra charges. Even though I am a huge fan of satellite radio, there are no good options left for commercial-free music. I am sure a number of people feel the same way. This is leading a number of people to expect SiriusXM to fail miserably.


The DJs are annoying to me too...I can understand having them on the decades channels for a few hours as a kind of token of the past, but other than that they're just annoying.

I think for music your best options are Slacker/Pandora. Relatively inexpensive and available on computers, cell phones, standalone devices, iPods, etc.


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## Richard King (Mar 25, 2002)

> there are no good options left for commercial-free music


I've mentioned it before, but I have one of these (the G1 version): http://www.slacker.com/products/portablesTour The music is not only uniterrupted, but it is free with step up options. I replaced SXM with it.
http://www.slacker.com/


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## cartrivision (Jul 25, 2007)

BattleZone said:


> I assure you that sooner or later, one of the two systems will be decommissioned.
> 
> Given the large amount of duplication, the bandwidth doesn't do much good.


The duplication is necessary and "doing good" because half of their subscribers have hardware that can only receive broadcasts from one system and the other half of the subscribers can only receive broadcasts from the other system.

When a significant number of subscribers can receive from both systems, they will start moving towards elimination of that duplication, which will eventually effectively double their "uniquely allocated spectrum". What they won't do is shut down broadcasting on half of the spectrum that they own (which is worth hundreds of millions of dollars).



> What needs to happen is for the company to duplicate the channels on both systems,


They can't completely duplicate all programming on both systems. Neither system has enough bandwidth to do that. They've duplicated most of it with the music channels and selected "best of" channels, and that's about all that will ever be duplicated.



> then announce a date for several years in the future where one service will be discontinued. All new sales should go to the other service. 6 months before the cut-over, subscribers of the soon-to-be-obsolete service should get a $100-off (or 50% off, or something) coupon for the other type of radio when they turn in their old one. Folks with factory radios should get a similar credit. Yes, it will cost some money, but by driving all new sales to the "winning" system NOW, those costs 3 years from now will be reduced by a good chunk. And people who have been holding out getting sat radio can buy with confidence that their radio won't be obsolete.


The "winning system" is a radio that receives everything on both systems, not a system that obsoletes half of the broadcast spectrum that Sirius XM owns, while costing about a billion dollars to convert half of the subscribers from "losing system" radios to "winning system" radios by some hard date. That's just not ever going to happen.



> You will lose some subscribers, who won't like the changes or will resent losing their favored service, but that will be made up for by new subscribers who can finally get off the fence, and that turn-over will reduce the amount of replacement radios needed when the other service is shut off.


So your plan would be to quickly drive subscribers toward hardware that could only receive half of the spectrum that they have with the goal of eventually shutting down half of that very valuable spectrum? That doesn't make much business sense. What makes sense is to cause a slow move toward dual system capable radios, and to have any replacement satellites that are launched in the future merge the functionality of both systems so that each single satellite can support both systems. That way you don't have to lose subscribers by suddenly cutting half of your broadcasting system off, but instead slowly and continuously move more and more of the single system customers towards dual system receivers by slowly offering more and more content that is exclusive to only one of the two systems.


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## cartrivision (Jul 25, 2007)

Richard King said:


> Actually, it could be the best thing to happen to them. If those hard core fans who leave aren't enough to more than pay his totally rediculous salary SMX wins. I think they would win BIG.


The Stern fans subscription revenues more than pay for his (therefore reasonable) salary, so the only question is, how many of them will stay or leave if he doesn't resign for beyond 2010.

Sirius XM's financial problems aren't from the $100M per year that they pay to have Stern as their marque attraction, it's the 3 billion dollars of debt that they have. Getting rid of that $100 annual cost for Stern (while also losing the revenue that he brings in) isn't going to make any significant improvement in that 3 billion dollar debt problem, and it very likely could make it worse.


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## Richard King (Mar 25, 2002)

> The Stern fans subscription revenues more than pay for his (therefore reasonable) salary, so the only question is, how many of them will stay or leave if he doesn't resign for beyond 2010.


We don't know the first part, and the second part would only be speculation.


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## Ken S (Feb 13, 2007)

Richard King said:


> We don't know the first part, and the second part would only be speculation.


The company has stated they needed one million subs to cover Howards's payments (some of which was in stock). They have reported he brought in six million subs. Is that still speculation when company officials make the statements?

Look at Sirius' growth from the time Howard was announced as joining their lineup...perhaps that's all coincidence...He raised the profile of satellite radio in general as well.


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## rudeney (May 28, 2007)

Just because company officials make statements does not mean they are true.  I am not sure how they know that Howard brought in 6 millions subs. For example, when I subscribed, I was not asked nor did I offer any information about whether or not Howard was the reason. I suppose they could survey subscribers with a statistically relevant sample, and maybe that's what they did. Regardless, instead of knowing how many subs Howard generated, it might now be a more relevant question to ask how many subs would they _lose_ if Howard was no longer available.


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## Ken S (Feb 13, 2007)

rudeney said:


> Just because company officials make statements does not mean they are true.  I am not sure how they know that Howard brought in 6 millions subs. For example, when I subscribed, I was not asked nor did I offer any information about whether or not Howard was the reason. I suppose they could survey subscribers with a statistically relevant sample, and maybe that's what they did. Regardless, instead of knowing how many subs Howard generated, it might now be a more relevant question to ask how many subs would they _lose_ if Howard was no longer available.


They are constantly surveying their user base.
But, to get an idea of Howard's effect on their subscriber base look at where Sirius was when his signing was announced and where they were prior to the merger.

How many will leave? I doubt it would be all the Howard fans...at least not immediately, but I would bet there are many, many subscribers that only listent to Howard on Sirius and if he was gone the chance of them renewing would be pretty slim. That is, unless, Sirius can develop some other reason for them to stay.


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## rudeney (May 28, 2007)

As one who subscribes simply for the choices in commercial-free music, I just can't understand how people could choose to pay $13/mo just to listen to one show. I'm not judging them for liking Howard. In fact, I actually used to listen to him years ago when traveling to NY before he was syndicated. I jut don't see millions of subscribers paying the fees "just" for Howard.


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## phodg (Jan 20, 2007)

I subscribed to Sirius initially specifically because Stern moved there.
Having said that, I'd probably keep both subscriptions if he was no longer on. I could probably get my talk fix from Bubba and Jason Ellis if I had to, and I would find it difficult to go back to regular radio having had commercial free music for the last few years. Hopefully all his retirement talk is just hyperbole, though - I'd be surprised if he didn't re-sign. Although I think it would be a shorter contract this time - maybe 2 or 3 years max.


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## Richard King (Mar 25, 2002)

Richard King said:


> I suspect there is a 1 for 10 (or 20, or 30) reverse split in the near future.


http://www.mediabiz.com/news/skyreport/


> As Sirius XM CEO Mel Karmazin was saying at an investor conference there are "no plans right now" for a reverse stock split, bankrupt Worldspace was filing an emergency motion with the Delaware Bankruptcy Court saying Liberty Media subsidiary Liberty Satellite Radio was prepared to lend the financing needed to avoid liquidation. The motion suggested that Liberty Satellite would be prepared to entertain a "strategic transaction."
> 
> Meanwhile, with help from "Cash for Clunkers", which bolstered subs via new car sales, Sirius XM has seen steady gains in its stock price (though it remains well below $1). To keep the ball rolling, Karmazin has suggested that Sirius might launch a program to activate "idle radios" in hopes of winning back customers. So investors likely won't see their shares diluted ... at least for now.


So much for that idea. I don't understand why SiriusXM hasn't been delisted yet.


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## Dolly (Jan 30, 2007)

Richard King said:


> http://www.mediabiz.com/news/skyreport/
> So much for that idea. I don't understand why SiriusXM hasn't been delisted yet.


I thought it had been? Maybe it happened after you did this post?


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