Sirius vs. XMSR, From Flyonthewall Blog
Sirius vs. XM Satellite: Go With Sirius"XM Satellite Radio (XMSR) has gotten crushed during 2006, with the stock decreasing 57% for the year. It has been especially hard hit the last few days as XM warned it was going to miss its subscriber targets. The reasons for the miss were a bit weak--not enough radios and a vague outlook for subscriber growth.
Conversely, Sirius (SIRI) said yesterday that it is still very comfortable about hitting its numbers. The Karmazin approach of getting Howard Stern to be the front man for the company is paying off. The company had good adds in Q4 of 2005 and had a very good Q1 of 2006 (typically a seasonally weaker quarter for the industry.) In addition, the company gave the impression that they were being conservative about net subscriber growth prospects for the year.We should see a de-coupling of these two satellite radio companies as the improving fundamental performance for Sirius drives the stock higher.
Supposedly, XM's CFO inferred in his speech yesterday that it might even be a good idea for the two lone satellite radio companies to merge. That is not a big vote of confidence."
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posted by Theflyonthewall.com at
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http://theflyonthewallblog.blogspot.com/5/25/2006 12:02:00 PM
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