# To anyone that understands the stock market what does this mean?



## Dolly (Jan 30, 2007)

I know NOTHING about stocks or the stock market. So here is the link http://finchannel.com/index.php?option=com_content&task=view&id=26622&Itemid=4
Can someone please explain what this means?


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## Tom Robertson (Nov 15, 2005)

There are many measures of the "stock" market health. The oldest and most studied is the Dow Jones Index of manufacturers. Another example is the S&P 500.

The NASDAQ exchange lists thousands of stocks, so rather than track all of them, other smaller groups of stocks are used by people. The NASDAQ 100 is a group of 100 stocks, then there are others as well.

All the indexes that don't list all the stocks need to update their list every so often. The DOW used to include a buggy whip manufacturer. Obviously that company would not be very indicative of the stock market anymore. 

The NASDAQ 100 reviews it's list of 100 stocks each year and decides who is a good indicator of the NASDAQ. This year, they decided to take out 11 stocks, so added back in another 11.

Normally, being on an index is very helpful to a stock-- but only initially as fund managers try to add that stock to their portfolios that try to mimic an indexes behavior. 

Long-term, being on the NASDAQ 100 (or not being on it) won't affect a stock much. Individual stocks are driven by so many more factors (like general market direction) than which indexes list them.

(Now, if a stock gets de-listed from an exchange altogether for not meeting the exchange rules--that is a bad thing.) 

Peace,
Tom


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## Dolly (Jan 30, 2007)

Tom so good to hear from you :sunsmile: And thanks for the great explaination  But even without knowing about the stock market I'm afraid Sirius XM is headed for de-listing


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## Tom Robertson (Nov 15, 2005)

Ouch! I hadn't checked on the stock price. At 14 cents per share, they are well below the normal $1 price for listing on the NASDAQ. (If I recall correctly.)

Yes, they need to work with NASDAQ and shareholders to complete a plan that allows them to remain listed. (and otherwise viable.)

Peace,
Tom


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## DJConan (Sep 14, 2006)

Yeah, I believe NASDAQ needs to be $1 per share. When Sirius was hovering around $2.30 or so, I was going to buy some shares. I thought it could only go up after the merger. I sat back and watched it for awhile and it kept falling. Then after the merger, it didn't look good either. I've picked a lot of losers this year, but Sirius would have been my worst buy. 

If XM Sirius survives, this is potentially a great buy right now.


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## Richard King (Mar 25, 2002)

XM Sirius has a proposal in front of shareholders to do a reverse split that will bring the shares above the required $1.00 per share to remain listed. In a reverse split a shareholder receives fewer newly issued shares in exchange for their existing shares. Rumor is that they will do at minimum a 1 for 10 reverse split, although it could be as much as 1 for 100 shares. If it is a 1 for 10 and the previous close was $0.14, the new share price would be $1.40. If 1 for 100 the new share price would be $14. There would be 90% or 99% fewer shares outstanding after the reverse split. If you had 1,000 shares before the split you would have either 100 or 10 shares after the reverse split. I think they will probably do a 1 for 50 split, but, that's just my opinion.


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## Dolly (Jan 30, 2007)

Richard King said:


> XM Sirius has a proposal in front of shareholders to do a reverse split that will bring the shares above the required $1.00 per share to remain listed. In a reverse split a shareholder receives fewer newly issued shares in exchange for their existing shares. Rumor is that they will do at minimum a 1 for 10 reverse split, although it could be as much as 1 for 100 shares. If it is a 1 for 10 and the previous close was $0.14, the new share price would be $1.40. If 1 for 100 the new share price would be $14. There would be 90% or 99% fewer shares outstanding after the reverse split. If you had 1,000 shares before the split you would have either 100 or 10 shares after the reverse split. I think they will probably do a 1 for 50 split, but, that's just my opinion.


Now this is something I have heard about and do understand a bit. However, I have also read stories about some stockholders being dead set against doing it. In fact some stories were even quoting people that said they had already voted against it. (OOOPS Sorry I don't have any links) :blush:


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## Richard King (Mar 25, 2002)

There are some who are against it. I voted for it. It's the only way there will be a market for the stock. If it gets delisted it will probably go to a penny or so in a couple of months. They issued WAY too many shares and this is a way to solve that also.
Here's another story about the reverse split. http://www.businessweek.com/technol...op+news_top+news+index+-+temp_news+++analysis


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## HockeyGuy (Dec 13, 2008)

Richard King said:


> There are some who are against it. I voted for it. It's the only way there will be a market for the stock. If it gets delisted it will probably go to a penny or so in a couple of months. They issued WAY too many shares and this is a way to solve that also.
> Here's another story about the reverse split.


I voted for it as well. In addition to being subject to de-listing by being below $1.00/sh., they're also automatically excluded from consideration by most institutional, pension, and mutual fund managers. In the instance of mutual funds, many will explicitly require investments be made into companies only with share prices above a certain level ($5.00, for example).

The reverse split does not in any way harm or dilute existing shareholders. It's like thinking of how you could split a dollar. Suppose you had one-hundred pennies, and someone gave you 4 quarters in exchange. You'd still have $1.00 worth of currency, but you would have done a 25 - 1 reverse split (every 25 pennies got you 1 quarter).

The biggest challenge Sirius XM faces is the looming debt payments over the coming months. This isn't the best environment to get new debt financing, particularly as the recession is going to impact new and renewing subscriber revenues. An alternative is to issue new shares, which WOULD dilute existing shareholders. Another would be to issue preferred shares, or convertible bonds. A really nasty alternative would be to file bankruptcy, and reorganize. They'd end up wiping out common stock shareholders, and giving debtors pennies on the dollar. But they could emerge with an improved balance sheet. Not sure they'd ultimately withstand this PR hit though.


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## Richard King (Mar 25, 2002)

> They'd end up wiping out common stock shareholders, and giving debtors pennies on the dollar. But they could emerge with an improved balance sheet. Not sure they'd ultimately withstand this PR hit though.


I wonder what percentage of their customers are also shareholders. I know that if they went the bankruptcy route that I (along with all others) would no longer be a shareholder and would promtly cancel my subscription, as much as I enjoy having it.


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## Dolly (Jan 30, 2007)

Richard King said:


> I wonder what percentage of their customers are also shareholders. I know that if they went the bankruptcy route that I (along with all others) would no longer be a shareholder and would promtly cancel my subscription, as much as I enjoy having it.


Oh Mr. King you are a shareholder I didn't know that. I just hope somehow something can be done to keep the company afloat. I did read a story (again sorry no link) that said some of the shareholders were even going to donate money to Sirius XM. But the person writing the story didn't feel the shareholders themselves could donate enough money with all the debt Sirius XM has now to help them that much  But I must say with all Sirius XM has going against it those shareholders are really dedicated to the company, if they are willing to put up their own money to try to keep the company going.


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## tcusta00 (Dec 31, 2007)

Dolly said:


> Oh Mr. King you are a shareholder I didn't know that. I just hope somehow something can be done to keep the company afloat. *I did read a story (again sorry no link) that said some of the shareholders were even going to donate money to Sirius XM. *But the person writing the story didn't feel the shareholders themselves could donate enough money with all the debt Sirius XM has now to help them that much  But I much say with all Sirius XM has going against it those shareholders are really dedicated to the company, if they are willing to put up their own money to try to keep the company going.


Now this I'd like to read more about... I've heard of angel investors but this is pretty philanthropic of people to just give their money away to a for-profit entity without the promise of any return on it.


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## paulman182 (Aug 4, 2006)

tcusta00 said:


> Now this I'd like to read more about... I've heard of angel investors but this is pretty philanthropic of people to just give their money away to a for-profit entity without the promise of any return on it.


Seems to me there would be a lot better uses for one's charity...


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## Dolly (Jan 30, 2007)

tcusta00 said:


> Now this I'd like to read more about... I've heard of angel investors but this is pretty philanthropic of people to just give their money away to a for-profit entity without the promise of any return on it.


I will try to find the link for it. I can't promise I can find it again, but I will try.

EDIT: Sorry I looked long and hard to try to find the story again so I could post the link. But I couldn't find it again


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## Dolly (Jan 30, 2007)

paulman182 said:


> Seems to me there would be a lot better uses for one's charity...


Charity is what each person wants it to be. I have often wondered why Bill Gates gives so much of his money away in other countries while there are many needs in this country where his money could be put to good use.


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## Ken S (Feb 13, 2007)

Dolly said:


> Charity is what each person wants it to be. I have often wondered why Bill Gates gives so much of his money away in other countries while there are many needs in this country where his money could be put to good use.


Or why people would give money to take care of animals when there are so many people in need (see it works all ways).

I believe giving money to a worthwhile cause or needy individuals is always good and to discredit or question an act of charity because it helps someone who happens to live on the other side of some man-made line is really quite poor.


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## Ken S (Feb 13, 2007)

While bankruptcy is certainly a possibility it would most likely be for reorganization and not liquidation. SiriusXM has to come up with a large sum of money in 2009 to pay its debts. They're hoping the creditors will renegotiate with them...as leverage SiriusXM will threaten bankruptcy (sound like what GM and Chrysler are doing?).

Starting last year NASDAQ gave temporary waivers to companies with stock prices under $1. Those waivers will end early in 2009. So, either SiriusXM figures out a way to increase their stock price or does a reverse split. The issue most shareholders have with a reverse split is that it opens them up to even more dilution as new shares are issued.

Mel has his hands full.


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## Dolly (Jan 30, 2007)

Ken S said:


> Or why people would give money to take care of animals when there are so many people in need (see it works all ways).
> 
> I believe giving money to a worthwhile cause or needy individuals is always good and to discredit or question an act of charity because it helps someone who happens to live on the other side of some man-made line is really quite poor.


I was not discrediting Bill Gates. I have certainly paid him enough money myself. He obviously sees things in a different light than I do. I believe that charity starts at home. And once you have taken care of home then you can move on from there. And I'm sure you don't want me to answer the first part of your post because I know you won't like the answer.


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## Ken S (Feb 13, 2007)

Dolly said:


> I was not discrediting Bill Gates. I have certainly paid him enough money myself. He obviously sees things in a different light than I do. I believe that charity starts at home. And once you have taken care of home then you can move on from there. And I'm sure you don't want me to answer the first part of your post because I know you won't like the answer.


Dolly, my crack about the animals was facetious.
If it matters to you, Bill Gates has given huge amounts of money to US based charities. You should read up on his family's charitable giving as well as that of Warren Buffet.


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