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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 am a suscriber to XM (3) and Sirius (1).  There are only 4 or 5 channels on each that I regularly listen to.  As far as I'm concerned each could jettison 50 or 60 channels and still be considered a bargain.  Both XM and Sirius have created  monsters with so many channels and some very expensive programming that they might lose a certain percentage of sibscribers by cutting back on programmng.  But in the end, it could be worth it for survival.  They might consider tiered cost programmng to save $. Like cable and satellite tv.  In any event, as long as I can get my 4 or 5 favorite channels and I can talk to a live, English-speaking, US positioned, person when I have a problem (which so far I have been able to do), I will remain a subscriber.

I'm an XM subscriber and to reply to Greg F's comment the current monthly cost is about the most I would pay for this service.  Any more than the current monthly rate I would cancel the service and plug my MP3 player into the hole next to the XM logo on my car stereo.

That said, at the current montly cost I will continue to subscribe to the service.  I have 24 hour commercial free stations that play music I actually like.  If Sirius and XM want to bring big names to their service have them work pro-bono for the people who want to pay for premimum subscription add ons.  

Howard stern's contract is up in the next year or so.  If he doesn't renew his contract and decideds to leave satellite radio and retire (which is a good possibility), satellite radio and sirius-xm is pretty much done for!!

Greg you are an idiot, Howard Stern coming to Sirius is the reason Sirius destroyed XM in the last 3 years.  Why would you get rid of the show that has the largest listenership.  Go sit in the corner.

 I too am a subscriber  x2 since 04 ,most of my friends & family have ,ipods ,iphone ,and program their own music .the saturday nite programimg [ That's when I have the most free time] REALLY SUCKS.  Maybe these guys should stop & put some more thought into what people want and are willing to pay for .

In regards to Greg F's comment on slashing "expensive programming," specifically that of the "shock jock".  As a Sirius subscriber for four-years and and a cable television analyst for a national publication I can tell you that the afore mentioned shock jock was directly responsible for at least 5 million of  Sirius' new subscribers in 2005-2006, and some estimates place the number as high as 10 million, when he made the switch from terrestrial radio.  Cut him my friends and satellite radio will collapse, XM learned that hard lesson when they passed on him early on and opted for Oprah and Opie and Anthony et al.  How'd that work out for them?  Not too good.

I am sure that Howard will not get the same kind of pay day when and IF he renews his contract.  He brought in millions of listeners, many of us buying lifetime subscriptions< and caused the merger of the 2 companies.  

the main problem is servicing the debt that was rung up while getting to this point.  

I believe that part of the merger was self imposed restrictions on fee increases so raising fees is not a viable option

I previously subscribed to XM, when I purchased a new vehicle last year I was forced to switch to Sirius.  I prefer XM.  However, as a sports fan you would like NCAA College Football AND the NFL.  Major League Baseball AND the NBA.  You get where this is going?  If you're going to merge then truly MERGE.  I would pay slightly more if ALL stations were available.  It's not rocket science.  

Greg, thats the stupidest idea I have ever heard. Its bad enough my cable bill keeps going up.

I agree that there should be more basics than high cost dj's and has been morning drive time hosts that do not appeal to the magority of the audience. The music, sports, talk and news and especially the radio theatre are what keeps me interested. I could stand a small increase in price, but if it doubled or more, I would have to bow out, since I have it on three vehicles.

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