Wednesday, July 26, 2006

XMSR: Is There An Opportunity Going Into Earnings?

XMSR is scheduled to report earnings tomorrow morning. Over the past few months, almost anything that could go wrong did, and the stock price has responded accordingly, hitting 52 week lows on an almost daily basis. Analysts are expecting the worst, and therein lies the opportunity. Sentiment is overwhelmingly negative; however, if management is able to offer credible explanations and reasonable guidance going forward, perhaps investors will be forgiving. After all, satellite radio is one of the true consumer growth opportunities of the decade.

Here's what management has to cover on the conference call:

1. Explain management changes...what does this accomplish?
2. Discuss Q2 subscriber disappointment...what happened?
3. Update on FM modulator issues with FCC...what's the timing?
4. Update on RIAA, expected outcome
5. Marketing department shake up...discuss new direction
5. Future guidance, subs, churn, costs, etc.
6. Partnerships
7. New hardware
8. Sales of wearable devices, how are they going?
9. Opie & Anthony, what's the business deal?
1o. Guidance for CFBE...is it still 2007?

If these issues are addressed proactively, perhaps the investment community will forgive and forget!

7/26/2006 12:20:00 PM

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