Sirius Shares Plummet on Bankruptcy Report

Shares of Sirius XM Radio plunged more than 50 percent on a report about the satellite radio provider's ability to meet its looming debt payments and the possibility that it might seek bankruptcy protection.

The shares, which had languished in recent weeks around 11 cents a share, fell 51.7 percent to trade at a nickel a piece on Wednesday, after the New York Times reported that Sirius has been working with advisers on a possible Chapter 11 filing.

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Bankruptcy could put pressure on Charles Ergen's EchoStar, which reportedly owns a substantial amount of Sirius XM debt.

Sirius has $175 million of convertible notes maturing on February 17, $350 million of secured bank debt due in May 2009, and $433 million in convertible notes due December.

Analysts said that while Sirius Chief Executive Mel Karmazin had boasted that the company would meet its debt obligations, the tight credit market may have made that task more difficult as the payment date draws near.

"Sirius's options have dwindled,'' said Stanford Group analyst Frederick Moran. "This first refinancing hurdle, while only a small percentage of the company's debt, comes at a very difficult time relative to the credit market.''

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