Give me a break, one cannot compare the proposed merger between Whole Foods and Wild Oats to that of Sirius and XM Satellite Holdings Inc. (NASDAQ: XMSR). I know many Sirius and XM investors will lash out at me for this, but come on people! Sarah Gilbert made a very good case yesterday why the merger of the trendy food stores doesn't have antitrust issues: "There is a plentiful supply of organic and natural produce and other products available at both small local cooperatives and farmer's markets and large supermarket chains," least of all Wal-Mart Stores Inc. (NYSE: WMT).
Sirius and XM? Now that's a different story altogether. They are the only two satellite radio companies. There are no smaller competitors, or large competitors with a small market share. That's all there is -- Sirius and XM. Sure, the argument that the market includes iPods, internet and HD radios is very creative and may even work, but let's call it what it is -- a desperate attempt by the two companies to get their merger approved. They've even hired a lobbying firm.
Google and DoubleClick? Here I have to admit, despite fearing Google's increasing power and control over data and information, that there shouldn't be antitrust issues. There may need to be other regulations over what Google and other internet companies -- including Microsoft Corp. (NASDAQ:MSFT), Yahoo! Inc. (NASDAQ: YHOO) and Apple Inc. (NASDAQ: AAPL) -- can collect and save, but this has nothing to do with antitrust.
Finally, my favorite industry -- bookstores. Goldman Sachs Group (NYSE: GS) downgraded Borders to Sell from Neutral following the FTC's decision on Whole Foods and Wild Oats. While Borders and rival Barnes & Noble Inc. (NYSE: BKS) haven't agreed on anything yet, the Street was expecting a possible merger. The book superstore industry features two major players, but it isn't without competition and I don't see why there should be resistance to a merger from antitrust regulators.
WSJ blogger Dana Cimilluca also mentions the Chicago Mercantile Exchange Holdings Inc. (NYSE: CME) and the Chicago Board of Trade (NYSE: BOT) merger with possible regulatory problems despite CEO Craig Donohue's confidence.
It will be interesting to see how all this plays out in the final months of the Bush administration.
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Why isn't Bank of America updating its shareholders on CEO situation?
Reader Comments (Page 1 of 1)
6-06-2007 @ 11:59AM
Jeff said...
I pretty much agree with everything you said, but I believe a fairer comparison for the companies would be defining the end product for the consumer, not how it's delivered (satellite).
6-06-2007 @ 1:21PM
Melly said...
Jeff, you make a good point, about defining the end product.
I still don't see the similarity between iPod and radio. In one, I record my own music, in the other, I listen to others' choices. Sure, with satellite radio it's easy to change and customize to one's taste, but it's never exactly my choice.
I have both and they just don't compete: I listen to Sirius in my car, I listen to my MP3 when I do solitary things (walk, take the subway, read).
I think I'm not alone in this.
How do you see it?
6-08-2007 @ 12:03PM
Kermit said...
Gee I guess Satelite radio is the only way some one can listen to music when their in a car or at home how about FM and AM the key word hear is radio I would rather see them merge than go away and lose the option of subcribing to there service. I remember when there were only three networks on the television. If these guys start making money competion will come in the form of more satelite radio companies looking for a slice of the pie. I enjoy satelite radio but i dont subscribe because i feel its just a tad expensive. besides satelite radio is not a necessity people dont have to subscribe. the government should look at the recording industry if you want to see price fixing and monoply. they have been ripping us off for years.