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 “one entity owning both of those businesses.”
The stocks plunged on the news, although the recent hype artificially increased them anyway, so they're dropping back to where they belong. XM dropped by almost 10 percent and Sirius by 7 percent.
Comments by both CEOs of the company, along with poor fourth-quarter growth, f
ueled the speculation that drew some interest from the media.
It's possible that this was a coordinated trial balloon by the two leaders of the companies to see if they could get the thoughts of the FCC before they attempted initiating a process that would be time consuming and costly.
With internal objections to the business models that these companies have been using and the decreasing rate of growth, these companies need to take heed to those that have made their concerns known.
The outrageous amounts of money spent to get celebrity personalities on their programming is irresponsible. It's one of the reasons that XM had one of their directors quit when executives wouldn't respond to his idea that the company should be grown through cash flow rather than spending binges.
These companies are going to be in trouble and struggle for a long time; if they survive at all.
Other Posts On XM and Sirius:
XM Satellite Radio Director Quits in Feud over Spending
Satellite Radio Growth Slowing
Sirius Satellite Radio Falls way Short of Projected New Subscribers
Sirius Needs to Merge with XM - XM Doesn't Need to Merge with Sirius
Stupid Sirius Satellite Radio pays Howard Stern $83 Million Stock Bonus
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