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Technology Stocks : XM Satellite Radio Holdings Inc. (XMSR) -- Ignore unavailable to you. Want to Upgrade?

To: i-node who wrote (385)	11/24/2002 1:27:44 PM
From: russwinter	Read Replies (1) \| Respond to of 3386

<Do you see these other stockholders allowing this business to proceed into bankruptcy> I would also submit that one or more of those shareholders may understand development situations and could avail themselves to a greater equity stake at well above the $2 a share of "public market value" (stock market). A private market transaction might very well see much greater value and potential than the depressed, indifferent public one.

To: i-node who wrote (385)	11/24/2002 4:24:25 PM
From: pcstel	Read Replies (3) \| Respond to of 3386

Do you see these other stockholders allowing this business to proceed into bankruptcy where they come away with zero? I don't think any of them would view it as "throwing good money after bad"... 1) GM stands to gain more by working with XM than by letting it go into bankruptcy, which will only serve to put the brakes on subscriber growth. Your view is well taken. But, I might point out that if GM executed the 200 million in exchange for debt instruments. They would probably own more of a debt free XM post petitiion vs. their position today. As would almost any of these current investors who stepped up with DIP Funding. Investors of many Bankrupt Companies incorrectly held the view that the current investors were not willing to accept the loss! Like Globalstar Owned 38% by the shareholders 40% by Space Systems Loral 6% by Qualcomm Inc. 5% by Vodafone 3% by ChryslerDahlmer 3% by China Telecom 3% by France Telecom/Alacatel There were some pretty big names involved. Most cut their losses instead of deciding to ante up more funding. Towards the end. Both Loral and Qualcomm started moving short term un-secured payment obligations into unsecured debt. Loral went so far as to borrowing 500 Million to buy 500 million in Debt that Loral had guaranteed for Globalstar. So, Loral bought Globalstar's debt that was full recourse to Loral. So that in BK. Loral would be entitled to a 500 million debt claim, versus being full recourse to Bank Debt, that the bank would be entitled to the debt claim, while leaving Loral on the hook for the "loan guarantee". In addition, in a succesful re-org. Both Loral and Qualcomm will own the same amount or more of a debt free Globalstar than they did pre-petition. If this were SIRI, it would be different Actually, the proposed SIRI out of court reorg is an example of how these things should work. Notice in SIRI's reorg. The Debt Holders are going to exchange Debt for Equity. Other companies that are out to save the current ownership structure have done the same. See Nextel's Debt for Equity/Cash Swaps et al. In XMSR's case. Instead of swapping Debt for Equity. GM wants to swap unsecure payment obligations due years out, into Debt Instruments. Call me a cynic..... But, I have just watched too many of these "Flight to Debt" moves followed by a BK filing in the past couple of years. And so it goes, PCSTEL