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Re: [Swprograms] Worldspace files for Chapter 11 bankruptcy
I concur with you, John. Some of this was expected but they are in a desperate
situation. Even if, by some miracle, they become significantly profitable, the
debt situation and the nearly worthless stock mean they can only survive with
either a huge cash infusion by some knight in "green" armor or by going the
bankruptcy route and hoping to buy time.
Sadly the huge money paid to talent plus the debt incurred by building and
launching satellites meant they had a short window to become profitable. With
the current bank situation they have seen that window begin to slam shut.
So, if you have a few tens of millions (and that will be all it will take) you
will be able to do what the current owners of Iridium did... buy the SiriusXM
company in bankruptcy for a song and then make it profitable. Worldspace will
come even cheaper.
--
-Rob de Santos
-----Original Message-----
From: John Figliozzi [mailto:jfiglio1@xxxxxxxxxxxx]
Sent: Sunday, October 19, 2008 8:46 PM
To: josephbuch@xxxxxxxxx; Shortwave programming discussion
Subject: Re: [Swprograms] Worldspace files for Chapter 11 bankruptcy
Some of this was to be expected. There is no need for redundant
"decades" music channels (i.e.: 50s, 60s, 70s, etc.) on each service,
for example. Eliminating redundant services frees up bandwidth for
other stuff or just improved performance on remaining channels. Or not.
The reverse stock split has to happen. Of course, at the same time
they're going to ask stockholders to approve the sale of new stock to
help cover the debt already incurred. Can't see how those two things
work together, but maybe I don't understand basic economics as well
as I think I do.
Part of me thinks that Karmarzin has been pulling off a gigantic scam
in broad daylight. The absolutely ridiculous sums paid for talent
has allowed those thus paid to run off with a lot of stockholder
money that will never come back. Of course, since I'm a subscriber
as well as an investor (small time, but an investor nonetheless) I am
an enabler.
The idea had great promise. But instead of finding new people with
new ideas, the services turned to refugees from "traditional" radio
to run things. Maybe when all is said and done that will be the
reason this experiment ultimately fails and flames out.
John Figliozzi
On Oct 19, 2008, at 11:46 AM, Joe Buch wrote:
> I look for satellite radio broadcaster SiriusXM to have to do a
> similar maneuver this winter. They have a mound of debt coming due
> this winter which will have to be refinanced in this very scary
> credit market. XM recently announced layoffs of about 80 people
> from the music programming side. They are considering a reverse
> stock split to get the price per share above $1 to avoid NASDQ
> delisting. Rumor is that on November 5 they will announce a merged
> program stream between Sirius and XM subscribers.
> Source <http://www.orbitcast.com/>
>
> Joe Buch
>
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