What do you think will happen if SiriusXM go out of business?

Brad Bishop

Member
Dec 3, 2008
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There's so much more to this than, "Their stock is low so they'll just shutter their doors one day."

What may happen is that they do a reverse stock-split which, for most people, would make them look good in the stock market again because most people evaluate a company based on the price of the stock and not the market cap. If the stock value is low, like it is now, then people think it's junk. Do a reverse stock split and put it at a few dollars a share and suddenly your average dolt will think that they've recovered without any kind of thought as to, "oh, there was a reverse stock split - they're really about the same."

If they do file for bankruptcy then they'll could file Chapter 11, renegotiate contracts (Howard, etc.) and start rebuilding.

They also could just add commericals to their content, justify it as necessary in order to stay in business and, although they'd lose some subscribers in doing so, they may make more money from their remaining subscriber base plus the ad revenue. Like I said, there will be those that say, "No way I'm staying around for this! It's supposed to be ad-free and I'm paying for premium radio!" (and there's really nothing wrong with that argument) and there will be others who will be apologetic about it and say, "Well, it doesn't do them any good to remain ad-free if they can't stay in business. They'll need to raise subscription rates, otherwise!" (I've seen much of the same on TiVoCommunity). Regardless, it's a tactic they could use (the allowing ads deal, not the comments by forum members).

I'd say that the worst thing is that they don't have direct competition with each other. I think that would have kept them lean/mean. You could argue, "but they would have both gone out of business if they remained as-is," and that is true but that would have forced them to do something different to remain in business and competitive. I remember the same argument from DirecTV and DishNetwork about how both of them were going to close up shop unless allowed to merge. They're both still here, just as strong as ever as far as I can tell.

I'm just saying that there's a lot more to this than their stock price and them folding up in a few days/months/years. I just don't think it's that simple.

That being said, I think they have a few perception problems to deal with:
- They've almost become like CB radios in the late 1970s. Everyone seemed to want one but after they had them for a while they simply didn't care and didn't keep them in their cars long term. I really can't name any new subscribers that I personally know. They seemed to peak a few years back (based on my knowledge of friends/family)
- Most people seem to like satellite radio when they have it (like in rental cars) but don't miss it when it's not there.
- They've changed it to be more FM-radio like (Sirius Hits 1 is a fine example of that with their (IMO) horrible morning crew) and, from my take, FM radio (at least here in Atlanta) seems to have actually improved over the last few years. Basically, I'd rather listen to a hits FM radio station locally than to Sirius Hits 1.
 

DAB

Mod Emeritus
Oct 9, 2008
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I remember the same argument from DirecTV and DishNetwork about how both of them were going to close up shop unless allowed to merge. They're both still here, just as strong as ever as far as I can tell.

I'm just saying that there's a lot more to this than their stock price and them folding up in a few days/months/years. I just don't think it's that simple.

Honestly the comparison to DirecTV and DishNetwork isn't very logical because both of them even though they were having a rough time were still making money and had been profitable. That has never been the case with either Sirius or XM and so the merger was absolutely necessary. XM would have had to file for bankruptcy already if they had not merged, because of the debt that came due right at the time of the merger, but that comes due in February. The merger just made sense overall, whereas the merger with Dish and Direct did not. Both decisions were the correct ones.

I agree that this isn't just about the stock price and I don't see them just shutting the sats off one day and going to the house. I think there will be a long process of going through a bankruptcy and so it will take a long time before they either get back on track, or bought up or finally get auctioned off and shut down. The FCC will want to protect those customers that made an investment, so they aren't going to be gunning to get the spectrum back unless the company does in fact shut down totally. I personally just don't see it totally going out of business, but stranger things have happened.
 

TheScionicMan

Last non-Hating Stern Fan
Oct 11, 2008
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The FCC will want to protect those customers that made an investment,

Kinda like how they "protected" us from the merger by dragging it out for 18 months. That's the other thing that really hurt them. They missed the xMas shopping window TWICE and lost all the momentum from the initial merger news. A fine example of our Govt in action, er... I mean inaction
 

DAB

Mod Emeritus
Oct 9, 2008
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Kinda like how they "protected" us from the merger by dragging it out for 18 months. That's the other thing that really hurt them. They missed the xMas shopping window TWICE and lost all the momentum from the initial merger news. A fine example of our Govt in action, er... I mean inaction

OH that was an ultimate disaster, but we are talking about spectrum here not a merger. My point is they aren't sitting at their desk waiting to rip the spectrum out of Sirius XM control to sell it. I think they will allow them to go through any and all processes and only after the doors shut would they even consider this due to those consumers. The FCC screwed up on the merger, but not everything they do is bad.
 

Brad Bishop

Member
Dec 3, 2008
576
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Kinda like how they "protected" us from the merger by dragging it out for 18 months. That's the other thing that really hurt them. They missed the xMas shopping window TWICE and lost all the momentum from the initial merger news. A fine example of our Govt in action, er... I mean inaction

I was thinking about this after I posted (thinking I should have mentioned it) - Anyway, yeah, I think that hurt them. I remember DirecTV sales falling flat while everyone waited to see what was going to happen during that proposed merger.
 

VinnyM27

Active Member
Oct 14, 2008
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Honestly, losing the Strobe makes me feel like I've nearly lost Sirius, so it won't be such a huge shock for me. If someone buys it, and they manage to screw with the formats even more and make them more homogenized (if that is even humanly possibly) I'm done.