Sirius Satellite Radio (NASDAQ: SIRI) ended the year with 8.3 million subscribers, up 38%. The company would probably prefer to have had its merger with XM Satellite (NASDAQ: XMSR) approved, but the subscriber growth is a consolation prize.
Chief Executive Mel Karmazin told The Wall Street Journal, "Our gross subscriber additions in 2007 were the highest in the history of satellite radio."
That still leaves open the question of whether Sirius is a viable company without the merger. It lost $121 million last quarter and it has long-term debt of almost $1.3 billion.
Some analysts believe that the merger will bring savings. But, the talent on the two satellite networks is not likely to want to take pay cuts. The new company would also have to run two networks for some period because the systems are not comparable.
The subscriber additions are nice news, but the company is still a long way from being viable.
Douglas A. McIntyre is an editor at 247wallst.com.
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Reader Comments (Page 1 of 1)
1-04-2008 @ 12:27PM
beanspants said...
the systems are comparable, they just aren't compatible, without an adapter that i've heard is in the works.
however, i didn't come to quibble with grammar, but rather suggest that even with those subscriber gains, SIRI is not a viable company without the merger, and is a *barely* viable company with the merger.
it might be a crazy bet to buy some shares for the merger bump for funsies, but otherwise, i'd stay away.
1-09-2008 @ 4:07PM
Brian Patterson said...
A merger will realize profits.
3-04-2008 @ 12:29PM
Maxdee55 said...
What I don't understand is with 8.3 million suscribers if you average it out to 10 dollars per suscriber per month, that generates into almost 1 billion in revenue for the year. Some of the shows like Howard Stern still sells advertising, how are they losing so much money? I recall Sirius saying they would be a viable company with 7 million suscribers, what happened?