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It's not just people who are looking to slim down during this time of year. Sirius XM Radio (Nasdaq: SIRI  ) keeps nibbling away at its debt. In an SEC filing last night, the satellite radio operator announced that it will be issuing 45.2 million shares to redeem $6 million worth of a Sirius convertible note that was due next month.

It may not seem like much, but after a string of deals, that $300 million debt repayment milestone has now been whittled down to just $187.6 million.

The company isn't out of the woods just yet. It still has more than $3 billion in debt on its balance sheet, with $350 million of that due in May and another $400 million by year's end.

However, every week finds the company taking baby steps in tackling this year's refinancing hurdles. Since being granted the authorization last month to have as many as 8 billion shares outstanding, Sirius XM has some of the ammo necessary if it continues to find debt holders willing to swap their bonds for equity.

The challenge for Sirius is to drum up the catalysts to smoke out the shorts and get its stock moving higher. Last night's deal prices the 45.2 million shares at just over $0.13 a share. The dilution will obviously be less painful if the stock heads higher in 2009 as the company barrels through the rest of its tollbooths.

What can those catalysts be? Some of them are beyond its control. Did you hear Chrysler warning that new car sales were slashed by more than half last month? As long as Sirius XM partners like Chrysler, General Motors (NYSE: GM  ) , and Ford (NYSE: F  ) are struggling to move new automobiles, that will translate into fewer satellite receiver activations.

There are certainly plenty of cash-rich companies in the digital music space like Apple (Nasdaq: AAPL  ) , Yahoo! (Nasdaq: YHOO  ) , and RealNetworks (Nasdaq: RNWK  ) , but they are unlikely to emerge as sugar daddies when they compete with Sirius XM (and any buyout chatter would crush margins).

This shouldn't stop Sirius XM from trying to strike deals with the sexy companies that will get investors excited about Sirius XM's prospects again. There's no time to waste. The clock is ticking.

Some other tales of low-priced stocks on the move:

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Longtime Fool contributor Rick Munarriz is such a fan of satellite radio that he subscribes to both Sirius and XM. He does not own shares in any of the stocks in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.

Read/Post Comments (8) | Recommend This Article (38)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 06, 2009, at 1:42 PM, ByrneShill wrote:

    Face it rick, siri is heading for chapter 11. Nobody's gonna be paying for satellite radio when they have trouble buying food for their kids.

  • Report this Comment On January 06, 2009, at 1:49 PM, DemianBohemian wrote:


    You didn't even mention the new Sirius/XM iPhone app that is now in beta testing.....

  • Report this Comment On January 06, 2009, at 2:18 PM, mapkos13 wrote:

    All I ever read about is SIRI headed for disaster. While that may be true, I also believe that everyone is a little punch drunk from this stock. So much negativity has been spun from this from these boards to those with their "inside sources" its hard to say which end is up or down. I may be what many would consider a "foolish" investor but what I do believe in is my gut, and my gut tells me this is a great product. My gut tells me that while some missteps have been taken this company will see the other end, it has to, there is too much potential.

    This product has been for those with disposable income and with the cost of gas back in line there should be no problem feeding the kids. Hell people spend $7 on cigarettes, coffee and booze so I'm sure that those that like this service don't have any issue spending it on their subscription.

    Just my opinion but I'm staying in for the long run and will buy more with it so low. Mel's ego is too big (god bless him) to let this fail.

  • Report this Comment On January 06, 2009, at 2:24 PM, jerseygoods wrote:

    Byrne Shill who are you shilling for?...Sirius sp is up 3 days in a row to .14 and has paid off almost 1/2 is Debt due in Feb..They are making moves that are making sense and everyday their is something new that is positive.....Ask your self why would any take shares from a company or a company pay down the debt if they where gonna file chapter 11... So obviously you dont know what your talking about...Motley Fool Thanks for the GOOD info its a change even from you guys in the right direction...

  • Report this Comment On January 06, 2009, at 4:14 PM, Milligram46 wrote:

    In early 2004 I was broke as broke could get. No other way to put it. Despite that I was spending roughly 2-1/2 to 3 hours behind the wheel every day. XM Radio (now part of SIRI) was a small luxury I simply would not part with.

    Seriously - buy one new shirt at the thrift store for $10 - XM Radio - I'm listening to XM Radio and wearing the stained shirt I still own on the weekend around the house.

  • Report this Comment On January 07, 2009, at 10:42 AM, XMCommute wrote:

    One great use of this service is rarely described. I walk to/ride in a commuter train for ~3 hours each day. During that commute I listen to the business/cable network news on my INNO, switching to my recorded favorite music where reception fades. I love it. There is NO alternative.

  • Report this Comment On January 08, 2009, at 10:28 AM, jddubya wrote:

    Things are starting to look up for Sirius:

    "SIRIUS XM Radio Presents MiRGE, the First Interoperable Satellite Radio

    Jan 8, 2009 08:00:00 (ET)

    NEW YORK, Jan 08, 2009 /PRNewswire-FirstCall via COMTEX/ -- New interoperable Dock & Play radio delivers every SIRIUS and XM channel on one radio

    SIRIUS XM Radio (SIRI, Trade ) announced the launch of MiRGE, the first interoperable satellite radio. MiRGE allows subscribers to easily switch between SIRIUS and XM, allowing them to receive all the dynamic and exclusive commercial-free music, news, talk, sports and comedy channels and shows from both services."

    "The MiRGE can:

    -- Effortlessly switch between SIRIUS and XM at the touch of a button

    -- Display channel information on a large, customizable color screen

    -- Display a real-time programming guide - view the current channel plus

    three other channels at the same time

    -- Pause, rewind and replay up to 60 minutes of live SIRIUS or XM


    -- Surf channels on the fly using the large rotary tuning knob

    -- Alert listeners to favorite artists and songs that are playing on

    another channel of the active service with TuneSelect

    -- Track the latest scores and update on stock while listening to live

    SIRIUS XM programming

    -- Save 10 favorite SIRIUS and XM channels for fast access

    -- Lock and unlock channels individually or lock all explicit content

    channels on both services with easy to use parental controls"

  • Report this Comment On January 15, 2009, at 5:01 PM, FormerSIRI wrote:

    Interoperable receivers are useless now that Sirius has ruined most of XM by merging virtually all of the channels. The only differences are some of the talk channels such as Martha Stewart & Howard Stern, for whom I have no interest. I was once a dual subscriber, but cancelled both Sirius subs last week. Unfortunately, Sirius' channels prevailed in most cases. Where XM was about the music, Sirius is more about dj blather. Karmazin has greatly underestimated former XM listeners.

    I've kept our two XM subs as it's still far better than commercial radio. I listen to internet radio at home and look forward to the day we can get usable mobile internet. When that happens it will be the final nail in sat radio's coffin.

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