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• If Sirius has to be sold, who will buy?

  Posted Apr 03 2008, 11:45 AM by Douglas McIntyre
  Filed under: Apple, Comcast, Ford, DirecTV, Verizon, Sirius, XM Satellite Radio, AT&T, Time Warner Cable, Toyota, GM, Clear Channel, Dish Network
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  When the Justice Department cleared the merger of Sirius with XM Satellite there was anticipation that once the deal got done the shares of both companies would go up. A year ago, the combination was viewed as a dream deal.

  If anything, the shares have dropped. Sirius is below $3 and XM is below $13. The market began to realize that the year wasted on getting government approval was a year the companies need to stay competitive. XM has over $1 billion in debt. Refinancing it in the current market would be nearly impossible. Selling shares would lead to extremely large dilution.  As we recently noted, Goldman Sachs even put Sirius on its "Conviction Sell List" with a price target of $2.25.

  Growth at Sirius has slowed considerably. In the fourth quarter revenue rose only 29% to $250 million. But, for the full year, revenue was up 45%. Subscriber deactivations in the fourth quarter were almost 540,000 compared to 330,000 in the same quarter of 2006. The firm's net loss was $166 million. Long-term debt was almost $1.3 billion.   Read More...

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• Cable companies eyeing nationwide wireless network

  Posted Mar 26 2008, 12:10 PM by Kim Peterson
  Filed under: Google, Comcast, Time Warner, Sprint, wireless, Intel, Verizon, AT&T, Kim Peterson, Clearwire, WiMax
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  Lots of big numbers are being tossed around today in support of WiMax, a wireless technology that can deliver high-speed Internet access over several miles. Clearwire is a leader in developing WiMax, and has been trying to hammer out a partnership with Sprint for months. But working out a deal hasn't been easy, partly because building out WiMax is so expensive and partly because both companies have their own struggles to deal with.

  Now, the two biggest U.S. cable companies are stepping in with loads of cash. According to the Wall Street Journal, Comcast and Time Warner are talking about funding a new WiMax company, one that would be run by Sprint and Clearwire. The company would operate a nationwide WiMax network. Comcast is reportedly offering $1 billion and Time Warner is adding $500 million. Bright House Networks, a small cable company, might pony up between $100 million and $200 million.   Read More...

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• How Verizon became the next Comcast

  Posted Feb 20 2008, 08:38 AM by Douglas McIntyre
  Filed under: Comcast, Motorola, Verizon, AT&T
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  Verizon has been the ruler of the walk, but that has changed. Yesterday, the shares hit a 52-week low at $35.19.

  The large run-up in Verizon's stock last year was based on two things. The first was that its new fiber-to-the-home TV and broadband service was picking up customers from cable companies like Comcast. That sent Comcast shares to multi-year lows. Comcast's latest earnings showed that the impact of Verizon's initiative was less than expected. More recently the phone company said that it could not get HD set-top boxes to many of its new fiber customers. Motorola had fallen behind in making them. All of a sudden, the $23 billion that Verizon put into the fiber project did not look quite so good.

  Then the market was hit with news of a cellular price war between Verizon Wireless and AT&T. T-Mobile got in on the action just or fun. Cellular revenue is what has driven Verizon's revenue and operating income over the last several years as it has lost landline business to VoIP.   Read More...

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