Sirius XM Radio Awarded April 29th Panel Hearing For Exception Request

By Relmor Demitrius

Sirius XM Radio (NASDAQ:SIRI) today announced that they have been awarded an exception request panel hearing on April 29th to make their case for continued listing on the Nasdaq Global Exchange.  An independent panel will hear Sirius XM’s case and award Sirius XM the extra time they request.  This is considered a simple formality at this time, as experts and Sirius XM themselves expect an approval to remain listed until September 13, 2010.  This would be the extra 180 days to regain compliance on the minimum bid price rule on the NASDAQ exchange from the March 15th date.  Mel Karmazin, CEO of Sirius XM, has stated that he feels they will be successful in their attempt.  Sirius XM is one of the most heavily traded stocks on the entire Nasdaq trading platform and their market cap currently sits at a healthy 3.4 billion dollars.

The press release also states that Sirius XM expects to extend the companies agreement with stockholders on the reverse split option, which expires in June of this year.  A simple revote on the issue during the May stockholder meeting will be a vitrual certainty of passing again.  Liberty Media, through Liberty Capital (NASDAQ:LCAPA) owns 40% of Sirius XM, votes on all proxy’s as a 40% stockholder, and seem to be on the same page as Sirius XM on all corporate issues.  Greg Maffei has stated that Liberty’s approach to Sirius XM’s management is “hands off” and we will let them “run their business”.  These comments clearly indicate Mel is in charge, and if he wants a reverse split extension, he will get it.  This is the only option that Mel would have left if the stock still didn’t trade over $1 by September 13th, 2010.  At that time, the company would have no choice but the execute the reverse split, or be removed from the exchange.  There is a possibility the NASDAQ minimum bid price rules might be changed to focus on the market cap of a company, and not the stock price.  This would allow a permanent amount of time to regain $1. 

With most analyst price targets well over $1, and simple EBITDA evaluations showing an extremely undervalued equity, Sirius XM could be trading over $1 in days, forget months.  With rumors of strong March auto sales investors of Sirius XM might not have long to wait.

Long SIRI