On the news that Sirius (SIRI) Satellite Radio was lowering its 2006 subscriber forecaste, satellite radio stocks plunged to even lower than they have been. Sirius itself lost almost 8% of its value, going down to about 3.85 a share, while chief competitor XM Satellite (XMSR) dropped 5%, to 13.94 per share.
Sirius revised it projections, originally set at 6.3 million subscribers, down to between 5.9 and 6.1 million by the end of the year.
Marketwatch reported that "Bear Stearns analyst Robert Peck cut his rating on Sirius to underperform, citing a weak retail environment, the lack of a 'Howard Stern transition' that could drive holiday subscriptions and market share concerns."
For the most part satellite companies are now relying on new car sales to drive their growth, hoping their offering of the free service for a period of time will include customers hanging on to it when the trial period ends.
I just don't see that has a great strategy to incorporate over a long period of time. The truth is that just not that many people want the services. The example of Howard Stern reflects that. An extremely small portion of his former viewers followed him to satellite radio, in spite of is popularity. I'm not sure these companies will have much value for years to come.
» CC Chaiman Says Sirius Satellite Radio and XM Satellite Radio Merger Prohibited from BizofShowBiz
With the speculation that has be swirling around the possible mergers of Sirius Satellite Radio (SIRI) and XM Satellite Radio (XMSR), it may have been put to rest by FCC chairman Kevin Martin when he said that FCC rules prohibit... [Read More]
Tracked on: January 18, 2007 3:10 PM | Permalink to Trackback