I have a lot of shares in SIRI and I was really dreading today until Liberty bailed them out. I don't think they are out of the woods yet, but I am hopeful that they can make a long term recovery and I will be able to make some money out of it. I was strong enough to hold on when Sirius was staring bankruptcy in the face. I still think it is one of the riskiest stocks out there, but no risk, no reward.
by Beth Gaston Moon
Major movement, Deals, Sirius Satellite Radio (SIRI)
Stern fans, breathe easy! In breaking news this morning, SIRIUS XM Radio (NASDAQ: SIRI) and Liberty Media Corp. (NASDAQ: LMDIA) have reached a deal that will save the satellite radio company (for now) from the brink of bankruptcy.
Liberty will invest $530 million in SIRI, kicking off with a first phase: a senior secured loan worth $280 million, $250 million of which will be paid out today.
In response, Liberty will assume two spots on the SIRIUS XM board and receive 12.5 million shares of preferred stock, convertible into 40% of common SIRI shares.
SIRI CEO Mel Karmazin, told reporters, "Liberty's investment is an important validation of what SIRIUS XM has already achieved and a vote of confidence in what we will achieve..."
In pre-market trading, SIRI shares have jumped more than 80% to 19 cents per share.
Beth Gaston Moon works for WeSeed.com. The above comments are not intended as trading or investment advice.
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