Sirius XM is among the companies hit hard by the global recession.
It is reported that Sirius XM started off 2009 with about $3.4 billion of debt, $175 million of which must be paid off by the end of February- but they simply don’t have the money.
Most new satellite radio subscribers come from new car sales, as many new vehicles come equipped with satellite radios which push the buyers into subscribing to the service. However, with the huge slowdown of new car sales, there just aren’t as many new subscribers joining as is needed to sustain the operating costs and pay off the debt of Sirius XM.
If the company does file for Chapter 11 bankruptcy, it would be second-largest filing so far this year with total assets of over $5 billion.
Reports indicate that service may not be interrupted for subscribers if Sirius XM, but large overhead costs such as the salaries of Martha Stewart and Howard Stern will most likely be cut. The stock market took notice of this news and on Tuesday, February 11, shares of Sirius XM closed at a mere 11.4 cents a share.
If you currently subscribe to satellite radio, how do you feel about this breaking news?