Sirius XM Radio stockholders voted late last week to approve issuing nearly twice the number of authorized shares of common stock and okayed a possible reverse stock split.
A reverse split reduces the number of shares and increases share price proportionately. Companies typically split stock when they think the price is too low to attract investors. The Securities and Exchange Commission Web site also notes that some reverse stock splits cause small shareholders to be “cashed out” so that they no longer own the company’s shares.
At the annual meeting, Sirius XM stockholders okayed increases in the number of authorized shares from 4.5 billion shares to 8 billion shares. They also okayed an amendment to permit the board at any time prior to Dec. 31 of next year to effect a one-for-10 to one-for-50 reverse stock split.
Stockholders voted to re-elect the existing board, including Joan Amble, Leon Black, Lawrence Gilberti, Eddy Hartenstein, James Holden, Chester Huber, Jr., Mel Karmazin, John Mendel, James Mooney, Gary Parsons, Jack Shaw and Jeffrey Zients.
The company expects to file the voting results with the Securities and Exchange Commission.
Total shares represented at the meeting were 2.8 billion, representing about 88% of the total shares outstanding as of Oct. 20, 2008.
Sirius XM Radio will have trimmed 22 percent of its work force by year-end, as the satellite radio provider moves to cut costs amid slumping car sales.
The company will have cut 458 people from its staff, going down to 1,600 people from the 2,058 it employed before its July acquisition of XM. Sirius Chief Executive Mel Karmazin made the announcement at the annual shareholders meeting, according to a filing with the Securities and Exchange Commission.