Thursday, October 05, 2006

Motley Fool On XMSR

Time to Sell XM?
By Rick Aristotle Munarriz (TMFBreakerRick)10/05/2006

Was I wrong in recommending shares of XM Satellite Radio(Nasdaq: XMSR) to Motley Fool Rule Breakers newsletter subscribers last year? The stock has been slammed over the past year despite a healthy bounce off its springtime lows. The sector has been slammed, too. Rival Sirius(Nasdaq: SIRI) has also seen its shares plummet despite having beaten XM in landing new net subscribers in each of the past four quarters.
We're now ankle-deep into the quarter in which both XM and Sirius expect to achieve positive cash flow before capital expenditures. This should be a glorious moment for the satellite radio revolution. Unfortunately, the market doesn't seem to care, even as XM and Sirius have grown to combine for 12.3 million subscribers.
Strumming chords and cutting cords Over on the lively discussion boards for Rule Breakers subscribers, someone asked whether XM wasn't setting itself up for another fall. The company is sticking to its year-end guidance of closing out the year with 7.7 million to 8.2 million subscribers. It's a figure that has already been hosed down twice this year. After landing 285,000 net new subscribers in the September quarter, the company would need to land 500,000 more listeners to hit the low end of its range...read more: here

10/05/2006 11:36:00 AM

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