Yesterday, Banc of America's satellite analyst Jonathan Jacoby issued a cautionary statement on Sirius Satellite Radio, Inc. (NASDAQ:SIRI), stating that there was a weakening of Sirius compared to 2005 holiday sales. Jacoby also noted manufacturing issues would be important this year and that channel checks indicate a weaker environment than 2005. He maintained a Neutral rating on SIRI and maintained a Buy on XM Satellite Radio Holdings, Inc. (NASDAQ:XMSR).
If you will recall, just yesterday Jim Cramer hogwashed this and said it was too soon to make that call even if it was true. This morning , however, we were sent an alert that Pacific Crest has made some similar comments to Jacoby's on Sirius (SIRI). Pacific Crest also has said that the initial trends are looking better for XM Satellite (XMSR), which also mirrors the Banc of America comments.
This is a boutique research call so it may not get much coverage today, but it could be the start of some commenting on the potential for new subscribers for the dominant holiday quarter.
It should be noted that Stifel Nicolaus put odds at 75% yesterday for a merger between XM & Sirius within 18 months. If we get anything more solid out of the report or on other issues we'll follow-up on it. The stock is down 1/2% on this pre-market, but investors should recall that this is only a $0.02 move to the downside since investors aren't rifling the shares of SIRI on "cautionary comments" if there is no outright downgrade.
With such a large number of analysts covering the name you will probably get quite a bit research either confirming this theory or refuting it in the coming days.
Jon Ogg is a partner in 24/7 Wall St., LLC; he does not own securities in the companies he covers.
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Reader Comments (Page 1 of 1)
11-29-2006 @ 4:40PM
Bobby said...
By now I think everyone knows that Jacoby for Bank of America is pro XM and will lie about Sirius in an attempt to help XM. Bank of America is trying to protect its investment in XM. UBS is in the same situation. Sirius Radio is clearly the choice of the people. This is causing a panic among those who are heavily invested in XM. I wonder why re3putable web sites even print these phony reports.
11-28-2006 @ 11:04PM
pauljbokowy said...
Before I bought my stock in a satellite company I had XM install in one of my car and sirius in my other car.After a year of each I bought sirius stock because I enjoyed the stations over XM,I feel both company have alot going for them and if they decide to because one who knows what will happen.The bottom line is that you should beable to make some real money.
11-29-2006 @ 9:37AM
joesph rosetti said...
if the sec let the 2 companys merge........there would be no question on which service is better....the only question would be with the lack of competition what would the subscriber pay
11-29-2006 @ 12:50PM
Marion said...
the franchise I am involved in just mandated that as of Jan 1 all of our stores must use Sirius as background in our stores
11-29-2006 @ 10:40PM
Juan said...
You guys refused to put my post up. Clearly shows your bias!
Just cover already 24/7!
11-30-2006 @ 10:46AM
Dragan Pelic said...
Of course Jonathan Jacoby is bias towards XM. Just google his name and Sirius and for the past 2 years, it's been Sirius bashing non-stop. 5 quarters in a row that Sirius is beating XM, and he continues his nonsense. But like Bobby mentionned, Banc of America has a huge investment in XM. Jacoby has basically lost all his credibility at this point. Good luck finding a job after this one !
11-30-2006 @ 8:26PM
Jimmy said...
Come on now...JJ doesnt anymore creditably at this point..He continues to bring siri into xm bad news..Understand our buddy JJ put a buy on xm 36 last yr and kept it there till xm was trading at 14 buxs a share..Now that is what I call a creditable source..He has been dumpin on sirius 4 3 yrs now..Sirius is now the Number 1 sat radio company and will probably take over xm next yr in total sub count..Bottom line!!!He is a bias analyst..Google who brought xm public and the answer will BOA..
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