Excerpted from WSJ: “Sirius XM Sends Signals of Change”, September 15, 2008
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Since the merger of Sirius Satellite Radio Inc. and XM Satellite Radio in late July, the company’s stock has fallen about 40%, and now trades at less than a dollar. The downward trajectory accelerated last week after the company issued subscriber forecasts that fell below analysts’ expectations and failed to reassure investors about looming debt payments.
CEO Karmazin … says there has been “a tremendous overselling of the stock” and that his company “is heading toward making a bunch of money in the future.”
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The merger of Sirius and XM was supposed to build confidence in satellite radio, in which subscribers pay a monthly fee for programming that is delivered through special receivers.
The months ahead will be a crucial proving ground. Sirius XM hopes to regain traction with consumers during the holiday season with its first programming packages and radio receivers that combine the Sirius and XM services.
As an enticement to consumers who tried satellite radio but didn’t stick with it, Mr. Karmazin has considered a plan to reactivate the radios of lapsed subscribers and give them a small selection of programming free of charge.
The company will soon introduce radios that allow consumers more flexibility in the programming, including a 50-channel plan that costs $6.99 a month. Sometime next year, radios that can play the entire lineup from both Sirius and XM will hit the market.
Starting next month, even those who don’t upgrade their radios will be able to pay an extra $4 a month and get a few “best of” channels from the other company’s service. For example, a current XM subscriber will be able to get Howard Stern and Martha Stewart, now exclusively on Sirius.
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Talk-show host Howard Stern’s five-year, $500 million pay package, announced in 2004, included 34.4 million shares payable to him and his agent, Don Buchwald. Then, the shares were worth about $110 million; by the time he joined the company in 2006, they were worth more than $220 million because of the stock’s sharp rise. Today, those shares would be worth $32.6 million.
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Full article:
http://online.wsj.com/article/SB122143532408734143.html
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The Homa Files 
September 24, 2008 at 12:43 pm |
Who wouldn’t buy some of the new Sirius portable radio devices when you receive 50 channels of uninterupted service for only $6.00 a month with which you can download and save for nothing. In todays times people are crazy for paying a dollar a song when you can record up to 5 hours from your Sirius radio devices unlike your old mp3 players and Ipod which I have both but won’t be using either anymore! You do the math when the average song is 3.0 miutes. This will explode into unbelievable service once the media giants like CBS and all the other radio ads stop interfering with progress. I don’t want my time wasted listening to ads all the way to work instead logon to the internet because if I’m interested in buying something than go to the internet or store. Ads are for Tv’s because thier interesting and funny to watch.