Sirius XM Stock At Five-Year Low
Just as Lehman Brothers, Freddie Mac, and Fannie Mae are in serious financial problems, Sirius XM Satellite radio is also in dire straights. Sirius and XM merged in a deal that combined the two existing satellite radio stations in hopes to grow and expand their listener base.
Sirius XM Chief Executive, Mel Karmazin, made some untimely comments during a September 9th Merrill Lynch sponsored event. His insight on the matter was, “The reason why radio sucks, and the reason that most of you don’t want to invest in it, is principally because the growth stopped”.
Analyst James McQuivey, from Forrester Research summarized the satellite radio efforts as, “The problem with satellite radio is it appeals very much to a very small group of people; once you’ve exhausted those people, you don’t have 10 million more.”
Shares of Sirius XM, the product of the July merger of the top two satellite radio providers, have plummeted 30% since Karmazin’s remarks, closing at 88ยข on Sept. 16, a Sirius five year low. Read the full article at Business Week. Many are speculating that the survival of Sirius XM may not last much longer without any new ideas to the company. Post a comment and tell me how Sirius XM can make more money!
