Is Sirius Serious? (SIRI, XMSR)

It is amazing how many days Sirius Satellite Radio (SIRI-NASDAQ) has hit our "52 Week Low Club" screen.  It is day in and day out.  It has now given up all of the gains made from hiring Howard Stern in the first place and is back to late-2004 stock price levels.  It’s as though the stockholders fired Stern, but still kept him on board.  The new Sirius television initiative has received less recent press coverage than K-Fed and the potentiality of expanded GPS inclusions gets no coverage at all.

Yesterday, a National Association of Broadcasters spokesperson was on CNBC discussing the monopoly this would create and how bad the merger would be for consumers.  He didn’t address the fact that Sirius and XM are not deemed as critical infrastructure like terrestrial radio.  Nor did he mention that if they can delay or get the merger blocked that there will probably only end up being one satellite radio provider anyway, because these companies will start to hit severe liquidity issues in the not-so-distant future. 

These two companies better figure a way to neutralize the merger critics.  As we noted previously, satellite radio subscribers can get a 3-year price lock if the merger goes through.  If not, they better just get used to the idea of higher prices much sooner for either company to keep its lights on.  Its merger partner, XM Satellite Radio (XMSR), is not faring any better but is down only 10.6% year to date and down 42% in the last 12 months.  SIRI is down 10.6% year to date and down 36.9% in the last 12 months.

Jon C. Ogg
April 3, 2007

JOn Ogg can be reached at [email protected]; he does not own securities in the companies he covers.