From a post by "Monterey" at xm411:
He was employed at AEA and while there they bought XM when it was in the low 40s and when they sold it it was in the low 20s. I would hazard to guess that Jack was responsible for pushing this investment and as a result he ended up on the board. In short, Jack is no longer employed at AEA but he is chairman of another company that was invested in by AEA.
I read elsewhere he was fired from AEA, don't know if it is true though.
The difficult thing about his resignation is that it was apparently because he believed XM shouldn't have been trying to counteract SIRI's Stern acquisition by spending money to maintain market share. What would he have them do? Just be happy with whatever they're left with?
XM's management was very specific about the guy's reason for leaving, and given that the guy refused any interview where could have refuted it, you have to believe management's version of it (which, by the way, made a lot of sense).
The guy didn't want to spend the money to compete. Unless you agree with that philosophy, I don't know how you can take the resignation seriously.
The fact that the guy left so publicly suggests he wasn't merely in disagreement, he was pissed. It was personal. There may have been financial disagreements, as well -- but he left with the specific intent of making it personal.
Given that, I think it has to be disregarded unless some other board member steps up and says, "Hey, we think spending it out of control over there."
If one were really speculating about what is happening here, it is hard to discount the WCS acquisition as a basis for this problem. It is sheer speculation, but one can readily see how this guy may have seen WCS for $200M plus the infrastructure buildout may have been seen as a bit too long-term during a time when getting to breakeven should be the objective.
That said, the WCS spectrum gives XM a huge competitive edge if that deal goes through. I would wager that's what this was about. |
