Chapter 11 for Sirius XM?
The graph of Sirius XM Radio stock looks like a runaway truck descending a mean mountain pass. News reports today speculate the escape ramp might take the form of Chapter 11 bankruptcy filing.
CNN.Money.com reported that shares plunged again Wednesday, to 6 cents, following reports late Tuesday that the company might try bankruptcy protection to avoid a takeover by Charlie Ergen, the chairman of satellite-television provider Dish Network and set-top box maker EchoStar.
The New York Times says a bankruptcy would be the second-largest Chapter 11 of the year. Not only is Sirius XM stuck with a $100 million contract with shock-jock Howard Stern, but it’s total debt is $3.25 billion. The company has never turned a profit.
In spite of chaos for the ownership, it’s believed subscribers will not see programming disappear, at least any time soon.
What would affect subscribers, at least those who are fans of the Open Road and Road Dog Trucking Radio channels, is a rumored merger of the two channels.
In response to my inquiry to Sirius XM about this and plans for Chapter 11, spokesman Patrick Reilly says, “We aren’t going to comment on that. But stay tuned.”
– Max Heine