Monday, January 15, 2007

Merger Considerations Offer A Wide Variety of Opinion

January 15, 2007

With a merger seeming to be the topic of the year so far in SDARS, investors should consider several things closely when considering your investment decisions, or even if you are contemplating a decision to get into the sector for the first time:

- Consider which satellite radio company you feel will see the biggest jump on news should a merger be announced.

- Consider what the impacts will be should a merger not be announced.

- Consider what will happen if a merger is announced, and the timeframe for approval/disapproval for a merger.

- Consider what a merger announcement followed by it being blocked would bring.

- Consider what opposition will be brought against a merger.

- Consider what may happen if a merger is announced and approved, and what actions a newly formed company would make. Would the stock be recapitalized? Would OEM and content deals be renegotiated? What would become of the negotiations with the RIAA?

- Consider how a merged company would spend marketing dollars, and how those dollars would be spent if the merger does not happen.

- Consider what is likely to happen in the time between a merger announcement and a decision by the FCC/DOJ. Will technical advances be placed on hold? Will these companies invest in joint hardware capable of receiving the full bandwidth? Will the CODEC's be aligned?

The bottom line is that investors have many things to consider regarding this subject. Invest in one company? Invest in both companies? Stay on the sidelines? Get out of a position? Switch positions? These are just some items that everyone following this sector needs to think about. In the meantime, opinions to the subject range across the spectrum. Prudent investors will gather as much information as possible, and consider all of the varied opinions prior to deciding on a course of action.

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1/15/2007 12:42:00 PM

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