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Sirius XM shares down to 97 cents

Posted Sep 10 2008, 02:58 PM by Kim Peterson
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Shares of merged sat radio company Sirius XM have plummeted 15% today to just 97 cents. That's because the company delivered a double dose of bad news for 2008: it will have a wider loss and slower subscriber growth than many analysts expected.

Sirius said it only expects to have 1 million more subscribers between now and the end of the year. It has 18.5 million today. But CEO Mel Karmazin said the forecast was "very, very conservative."

Analysts are starting to wonder if people lost interest in satellite radio in the 17 months it took the feds to approve the merger of Sirius and XM Radio.

Then there's the debt concern. Next year, Sirius must refinance $1.05 billion in debt that comes due.

Comments

 

I too am a subsciber. (Sirius - 1 license) I love the content. It's all I listen to both in my car and in my home. I too believe that they should cut some expenses with regard to "talent". They need to find better ways to control expenses, CEO compansation and those generous stock options. When the company is performing better, then they should get the better pay rates. Not before. Let get sirius for a minute and get the company under control.

Thanks. A Loyal Listener.

Also teach people to use XM. I love it and know how to use it, but many firends and relatives don't and need me to set it up for them. They don't understand the concept...this is more than just 20-somethings (they tend to be very tech savy)

Sirius-XM is doomed anyway.  Wireless broadband audio streaming in the car and on portable devices will put the final nails in satellite technology.  Sirius-XM had  unacceptable capitalization costs to start with so it was never a good bet financially.  Most wogs on Wall Street didn't get that to start with...it's a bad business model.  But no matter, Mel Karmazin and Howard Stern are laughing all the way to the bank!  I am a Sirius subscriber and while I like it, I can't wait for broadband in my dashboard...

I presently have three Sirius licenses and love it.   I agree that to cut costs and keep the prices affordable there should be a little less high dollar jocks and talk.  Thanks for bringing Sirius 12 "The Bridge" back.

baba booey!!

I couldn't agree more... As a longtime subscriber, I have watched more and more of the XM channels turn to a commercial format. The main reason I and many other early adopters ever got this beast off the ground was due to the promise of commercial-free music channels. Sure, there are SOME, but the ones that I and most people frequent are the commercial-subsidized channels.

So again, I say, I couldn't agree more with Greg F.'s post... One of the main reasons that so much debt will have to be refinanced next year is the ridiculous amounts of money promised to the shock-jocks and celebrity channel hosts (e.g., Oprah, etc.). These contracts attract a niche market AT BEST, and while there may be an initial blip in the subscriber base when they're first introduced, the attrition rate inevitably catches up with them.

Satellite radio WAS a great idea, and still could be. However, the current business model is clearly NOT working. I personally know at least 30 people in my immediate circle of friends/family that at one time or another were subscribers to XM or Sirius, and no longer are. The majority of those cancelled their subscriptions due to commercials on a "commercial-free" service. Face it people... NOBODY wants to PAY to hear commercials. We pay NOT to hear them. Who was the genius that came up with the idea to charge for playing commercials?? Find him, and off with his head! In all seriousness, the business model must change. Since they're now in the same boat together, they'll sink together, and that's a shame. If the FCC had done its job and kept this merger from happening in the first place, consumers would at least still have an option when the one service that didn't adapt to the market climate went under. By taking away competition AND choice, we, the consumer have been left with NOTHING when the inevitable axe falls.

Just my two cents... (or, $12.95/mth, as it may be).

If it wasn't for the 'shock jock', they'd a been dead long ago....

that shock jock is what brought in and keeps almost 25% of the business.  He is worth it.  I have had sirius for 3 years now and it is worth absolutely every penny.  Riding in a car with old FM radio absolutely kills me.  Commercials every other song, there is absolutely nothing like commercial free music.  

Sounds like Greg F. is an apologist for Mel K. and Howard Stern.  As a subscriber to it's rival XM I'd say it's not a bargin.  Too many issues with dead spots and the commercials on certain stations are seemingly endless.  Statelite Radio has it's points but Howard Stern and his endless reruns (my wife has Sirius) are a rip off.  

Both stations need a content enema.  Most of those sttions are useless.

i should buy stock in them since its affordable, they're not going anywhere... it will only get better....

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