Stern Gets 34M Sirius Shares

The jury is still out on whether or not Sirius Satellite Radio (SIRI) got itself a good deal when it signed Howard Stern to a 5-year, $500 million deal in 2004. Shareholders though, have to question if it was smart to offer Stern and his agent shares of stock, in addition to $100 million a year for his show.

Massive dilution is nothing new to Sirius, as they give stock out without a second thought. CEO Mel Karmazin got $14 million of stock in 2004 alone. This trend explains, in part, why the company is valued at $8.5 billion despite only a $6+ stock price. There are more than 1.3 billion shares outstanding today, and that isn’t even a fully diluted number.

For those keeping track at home, the 34,375,000 share allotment to Howard and his agent, to be delivered on Monday, will be worth $220 million, or 2.6% of the company’s current market value.