As Recession Fears Hit Consumer Electronics, Sirius (SIRI) Hits 52-Week Low

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Published: June 13, 2008 8:58 am

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For almost two years, the focus on Sirius (SIRI) and XM Satellite (XMSR) has been on whether they would craft a merger and then whether it would be approved. The FCC has effectively dragged its feet long enough so that it may not matter.

Neither company has ever posted a profit and each has over $1 billion in debt, so every day the attention about share price moves more to whether they can continue the rapid growth of their subscriber bases.

Concerns about consumer spending now have to be front and center for both firms. A large percentage of the satellite radios sold in the US are through new car dealers. With that industry in deep trouble, satellite radio is going to be hurt, almost without doubt.

The other question is whether sales though consumer electronics outlets will drop. In theory, they should. The average citizen has nothing but lint in his pocket. Buying a new radio is probably not on the list.

Douglas A. McIntyre

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