More on Sirius XM

Sirius has scheduled its annual shareholders' meeting for December 18, and has filed an agenda with four items: the re-election of the board of directors; approval of an amendment in the certificate of incorporation to increase the number of authorized shares of stock; approval of a reverse stock split; and ratification of the appointment of KPMG as accountant.

This is the meeting that Hartleib and allies hope to have postponed.

I've done some quick research on the lawsuit mentioned in Mr. Hartleib's recent press release. It appears he actually filed it months ago, in July, when the precursor company defendant was still known as Sirius Satellite Radio Inc.

The original complaint charged, (and I emphasize, I'm only conveying an accusation, one made as a matter of public record, and I don't intend thereby to give it any cerdence): "Upon information and belief, Sirius and XM did develop an interoperable radio, but based on claims that it could not be marketed commercially, never made the radios available to the satellite radio using public."

The plan to merge the two companies developed, the complaint says, as a way of avoiding the competition that interoperability would have made necessary.

At the end of that month, the merger closed.

In September the defendant moved to dismiss the case, arguing as follows: "Basically, Plaintiff, a private citizen, seeks through this action to substitute his own judgment for that of the Federal Communications Commission and the Antitrust Division of the United States Department of Justice, both of which conducted comprehensive reviews of the proposed merger and its competitive effects over many months -- and approved it."

The court granted the motion to dismiss, but in doing so gave the plaintiff leave to amend -- i.e. until October 27 to file an amended complaint that might cure the defects of the first effort.

So the plaintiff filed his amended complaint on time. This one focuses on the merger as a breach of fiduciary obligation. "The Board and officers of Sirius ... grossly mismanaged its operations by engaging in reckless financing of the merger [ignoring] warning signs that the merger ... would severely damage Sirius Satellite Radio Inc." The complaint notes that shares of Sirius traded at about $2 a share before the merger, and have since (as of late October) fallen to 29 cents per share.

The defendant has again, as of yesterday, Nov. 17. moved to dismiss. In its motion, it says thst the sort of charge I just quoted is a conclusory allegation "without particularized facts about the individual directors' supposed conflicts. Likewise, hartleib carelessly accuses the Board of misconduct ... without identifying specific wrongdoing by any particular member."

That's where matters stand as to the lawsuit. My guess (which is only a guiess) is that Hartleib himself is concerned that things aren't going his way, that the defendants may win this one as well. If so, then it makes sense that Hartleib would go public with a press release just as the defense is making its second motion to dismiss -- appealing over the heads of the judge to the public and the shareholders, so to speak.

Iridium Looking to an IPO

Tech Trader Daily, a blog under the Barron's umbrella, recently posted a story about Iridium, a satellite telephone company that hyped itself in the midst of the irrational exuberance of the 1990s as on a mission to change the world.

It didn't change the world. Indeed, its dreams collapsed ahead of the rest of the high-tech bubble of that time -- it petitioned for the protection of the bankruptcy court (Delaware) in 1999.

To summarize the TTD story: Iridium is a comeback success. It remained in bankruptcy for two years, until it emerged as the property of a private group of buyers led by Dan Colussy, who paid about $25 million for it to read TTD click here.

Colussy's group has since repositioned it. It no longer wants to change anything fundamental about the way people communicate, but it has found a few profitable niche markets -- as a back-up service for truck fleets, for example.

Anyway, Iridium plans an initial public offering for some time in 2009. Projects wuld be a better word there than "plans," since the projection seems vague. Still, here are two cheers for them. Hooray! Hooray! They formerly offered evidence that even when space launches are under discussion, grandiosity is a hindrance to profitability. Now they offer evidence, instead, that scaled-down practicality is the solution.

Let's hope we get more of such a less.