Sirius says reports of its financial troubles are not really false, but not true either:
- Recent news articles, fueled by a misleading report from Reuters, claim that Sirius Satellite Radio (NASDAQ: SIRI) could be forced to seek bankruptcy protection if it could not raise new funds by the second quarter of 2003.
This statement was taken from a Securities and Exchange Commission (SEC)
filing that speculated what Sirius may do if its fund raising efforts were to fail, and is routine reporting language about what any company could be forced to do if it were unable to secure additional funds for operation.
"We have a tremendous amount of momentum in the marketplace. All of our
radio, retailer and automobile manufacturing partners are very excited about
our product and the wonderful acceptance it has received by consumers," said
Joseph P. Clayton, President and CEO of Sirius. "We are making significant
progress in solidifying our balance sheet, and I remain extremely confident
that we will secure additional financing shortly."
The Quarterly Report Form 10-Q filed with the SEC contained similar language
Sirius has used in other SEC filings in the past to explain what could happen under certain circumstances.
The Reuters story, and its provocative headline, gave the impression that there was a new and troubling development that had not been previously discussed. This is blatantly false. Sirius has previously disclosed what its cash reserves were, and that it would require additional funding.
Also, according to conversations between Sirius and Reuters management, the
news service claimed that their decision to print the misleading story was
based on their assertion that Sirius had never used the word "bankruptcy" in
previous filings, and this constituted new information. This too is blatantly false. Sirius has used this routine cautionary term in previous filings, such as in its Annual Report Form 10-K.
In a conference call with analysts and investors on Tuesday, August 13, Sirius - once again - indicated its funding requirements and also stated that it was seeking additional financing from existing partners, bondholders and other stakeholders. This is not unusual in any way for a company launching a new product in a new industry.
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