Sirius XM (SIRI) Shareholders Approve Share Increase, Reverse Stock Split

Sirius XM Radio (Nasdaq: SIRI) shareholders approved several proposals at a corporate meeting today.

First, the company's shareholders approved raising Sirius XM's shares outstanding from 4.5 billion shares to 8 billion shares. While the company believes that the extra shares would give it the "additional flexibility" to address soon-to-be maturing debt, the proposal is receiving criticism as it would more than double the company's shares outstanding (Sirius XM had about 3.2 billion shares at the end of Q3). To boot, as shares of Sirius XM are trading at about $0.14 today, the offering may not even produce enough proceeds to cover the debt which will be due next year.

Sirius XM shareholders also approved an amendment that permits the Board at any time prior to December 31, 2009 to initiates a reverse stock split of SIRIUS XM common stock by a ratio of not less than 1-for-10 and not more than 1-for-50. This action is extremely important for Sirius XM shareholders as the reverse split will (hopefully) boost its stock price, potentially avoiding a delisting by the Nasdaq.

Along with reaffirmed guidance from the company earlier, news today is boosting shares of Sirius XM about 7.5% higher than yesterday's closing price.

Sirius XM Radio, Inc. provides satellite radio services in the United States.

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