XM Satellite Radio (NASDAQ: XMSR) closed at $8.44 Thursday.

XMSR and Sirius (NASDAQ: SIRI) announced a merger of equals in February of 2007. XMSR shareholders will receive 4.6 SIRI shares for each XMSR share.

Jonathan Adelstein, an FCC commissioner, said he'd vote to approve a merger between XMSR and SIRI if they cap prices and increase public interest and minority programming. The FCC Chairman Kevin Martin recommended approval of the SIRI-XMSR merger this spring. Adelstein would be the third of five commissioners to support the deal; a majority is needed.

XMSR August option implied volatility of 133 is above its 26-week average of 84 according to Track Data, suggesting larger price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Option Update: XM Satellite Radio (XMSR) volatility elevated as SIRI deal vote nears originally appeared on BloggingStocks on Fri, 18 Jul 2008 09:32:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• The Wall Street Journal reported that after years of rapid grows, many hedge funds are shutting their doors or merging with others, as expansion has dramatically slowed. As a result, the industry is being dominated mostly by big firms, such as Och-Ziff Capital Management Group LLC (NYSE: OZM), D.E. Shaw & Co., and Paulson and Co.
• Shares of Ctrip.com International Ltd (NASDAQ: CTRP), China's major Internet travel booker with about 58% of the country's online travel business, have dropped about 30% in the last six weeks alone creating a possible buying opportunity, according to the Wall Street Journal's "Heard in Asia". Travel in China is expected to grow solidly in the long-term and Ctrip.com said it expects revenue to grow 30% for the three months ending June 30 from a year earlier.
• In a move that could potentially usher in a new phase in the credit crunch, the Financial Times reported that The Goldman Sachs Group Inc (NYSE: GS) is said to be close to finalizing a plan to restructure a $7B investment vehicle formerly run by Cheyne Capital, a London-based hedge fund.

• The Washington Post reported the proposed merger between XM Satellite Radio Holdings Inc (NASDAQ: XMSR) and Sirius Satellite Radio Inc (NASDAQ: SIRI) was under fire yesterday by senior members of the Congressional Black Caucus, who said the deal does not provide enough opportunities for minority-owned programming.

Newspaper wrap-up: Hedge fund industry dominated by big firms originally appeared on BloggingStocks on Tue, 17 Jun 2008 08:00:00 EST. Please see our terms for use of feeds.

Continue reading Cramer on BloggingStocks: Worried about the satellite radio merger

Cramer on BloggingStocks: Worried about the satellite radio merger originally appeared on BloggingStocks on Wed, 11 Jun 2008 10:24:00 EST. Please see our terms for use of feeds.

MOST NOTEWORTHY:

• Morgan Keegan initiated Abercrombie & Fitch (NYSE:ANF) with a Market Perform citing lack of comp momentum and the outlook for consumer spending.
  
• Jesup & Lamont expects ENGlobal's (NASDAQ:ENG) earnings momentum to remain in place due to sustained demand for energy products. Shares were initiated with a Buy rating and $13.25 target.
  
• Soleil expects Wausau Paper (NASDAQ:WPP) shares to be driven by its value-added market focus, product innovation and improved mix. Shares were assumed with a Buy rating.

• Citigroup assumed coverage of XM Satellite Radio (NASDAQ:XMSR) with a Hold rating from Buy, and a $12.25 target from $17. The firm also assumed Sirius Satellite (NASDAQ:SIRI) with a Buy rating and $8 target from $4.25.
  
• Morgan Stanley initiated MarkWest Energy (NYSE:MWE) with an Overweight rating.
  
• Soleil initiated Potash (NYSE:POT) with a Hold rating.

Analyst initiations: ANF, ENG and WPP originally appeared on BloggingStocks on Thu, 24 Apr 2008 11:37:00 EST. Please see our terms for use of feeds.

MOST NOTEWORTHY:

• After EastGroup (NYSE:EGP) reported slightly higher-than-expected Q1 FFO per share, Cantor Fitzgerald downgraded the stock to Hold from Buy on valuation. However, the firm still believes that the company's business model and dividend fundamentals are well-positioned.
  
• Citigroup downgraded Take-Two (NASDAQ:TTWO) to Hold from Buy citing balanced risk/reward as the firm does not expect an aggressive competing bid process.
  
• Raymond James downgraded Calumet (NASDAQ:CLMT) to Underperform from Market Perform following the company's reduction in distribution to 45c unit from 63c.

• Citigroup lowered XM Satellite (NASDAQ:XMSR) to Hold from Buy.
  
• Oppenheimer cut First Midwest Bancorp (NASDAQ:FMBI) to Perform from Outperform.
  
• Bernstein downgraded DirecTV (NASDAQ:DTV) to Market Perform from Outperform.

Analyst downgrades: EGP, TTWO and CLMT originally appeared on BloggingStocks on Thu, 24 Apr 2008 11:20:00 EST. Please see our terms for use of feeds.

Continue reading Sirius and XM: A roller coaster ride

Sirius and XM: A roller coaster ride originally appeared on BloggingStocks on Thu, 13 Dec 2007 12:33:00 EST. Please see our terms for use of feeds.

With last week's BusinessWeek article expecting a verdict on the proposed merger between Sirius Satellite (NASDAQ: SIRI) and XM Satellite (NASDAQ: XMSR) soon, I feel that it's imperative that the regulators let the deal happen. Without a deal, both companies will continue to incur heavy losses, and the future of satellite radio will be in jeopardy. It's ironic that the antitrust lot are worried about a monopoly, but without a merger, the entire industry could be finished.

With plenty of competition coming from traditional radio, internet radio, and Apple (NASDAQ: AAPL)'s iPods, the government's worry over lack of competition is unfounded. Rather, the money saved by the merger in new customer acquisition will help keep the companies solvent. Doug McIntyre had a nice analysis of the deal a few weeks back, and he feels that with both stocks' recent rise, Wall Street is telling us that 1) they think the merger is going to go through, and 2) it would be mutually beneficial if it does.

If we can get a quick resolution to this, after months and months of foot-dragging by regulators, and the resolution is in favor of the merger, then this will be a defining movement for the satellite radio industry as it moves ahead and becomes a true media force to be reckoned with.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. Disclosure: Writer has no position in any stock mentioned as of 12/03/07.

Merger is the only way to save both XM and Sirius originally appeared on BloggingStocks on Mon, 03 Dec 2007 16:21:00 EST. Please see our terms for use of feeds.

With nothing better to do the day before Thanksgiving, The Wall Street Journal has decided to revisit the odds of whether a merger between the two satellite radio companies, XM Satellite (NASDAQ: XMSR) and Sirius (NASDAQ: SIRI) have improved. The paper writes "in the past few months, investors have shown increasing confidence of the deal's winning approval from the Federal Communications Commission and the Justice Department."

There may be a few good reasons that the chances of a deal have improved, but they are hardly compelling.

Some of the car companies have come out in favor of the merger. That would only make sense. Marketing two platforms is probably a bit of a mess. A fair number of congressmen who want to look good say the merger is bad for consumers, and will drive up prices. There isn't any hard evidence of that, but it is a nice talking point.

There is probably an economic reason for a merger. Both companies have over a billion dollars in debt. Paying that down would probably be easier with the savings from combining the companies.

But Wall Street may look at the share prices of XM and Sirius and say that they are the best sign that a merger looks good. The stocks are both up 25% in the last three months. Maybe investors are gambling the deal is looking better.

There is another reason for the stocks to be up: Both companies are still growing and adding subscribers. The firms may still be losing money, but they are moving closer to break-even.

That has nothing to do with a merger.

Douglas A. McIntyre is an editor at 247wallst.com.

A new look at the XM-Sirius merger originally appeared on BloggingStocks on Wed, 21 Nov 2007 10:10:00 EST. Please see our terms for use of feeds.

The FCC is not done examining the merger of XM Satellite Radio (NASDAQ: XMSR) and Sirius Satellite Radio (NASDAQ: SIRI). It sent detailed questionnaires yesterday seeking new information from both companies.

According to The Wall Street Journal the inquiries could "provide an indication of areas where the FCC could ask for concessions as part of any satellite-radio merger approval."

When the merger was first announced, shares of both companies rose. And each time there is a positive indication that the government may approve the merger, they jump again. But the rallies are short-lived. Third quarter earnings from the two satellite radio companies were modest.

The merger also may not look as good financially as it did at first. The companies do not have entirely compatible technologies, which means some redundant costs may stay in place for years. The sat radio stars, like Howard Stern, may want more money if their programs run on both services. Each firm has contracts with the major car manufacturers; it is not clear how those will be sorted out.

The unspoken driver of the merger is the one billion dollar plus debt that both companies carry. A consolidation that would cut costs might help the companies with their crushing debt service. But the longer the merger is delayed and the more time management has to spend on the FCC matters, the weaker the two companies become. Earnings for the third quarter showed that neither is a booming business right now.

Douglas A. McIntyre is an editor at 247wallst.com.

FCC digs deeper on XM Satellite merger with Sirius originally appeared on BloggingStocks on Tue, 06 Nov 2007 04:12:00 EST. Please see our terms for use of feeds.

$7 billion in cost savings if Sirius (SIRI) and XM (XMSR) merger goes through ... if originally appeared on BloggingStocks on Wed, 10 Oct 2007 13:33:00 EST. Please see our terms for use of feeds.

Continue reading It's not Sirius (SIRI) and XM (XMSR) shareholders' vote that counts

It's not Sirius (SIRI) and XM (XMSR) shareholders' vote that counts originally appeared on BloggingStocks on Fri, 05 Oct 2007 14:39:00 EST. Please see our terms for use of feeds.

Michael Copps, a member of the FCC, said that the tests for some upcoming mergers should be set higher. Two deals over which he showed special concern were the Sirius (NASDAQ: SIRI) merger with XM (NASDAQ: XMSR) and the News Corp (NYSE: NWS) purchase of Dow Jones (NYSE: DJ).

Mr Copps' worries about Dow Jones are simple enough. He is troubled that Mr. Murdoch will have such a large concentration of media in New York

He shows even more interest in the Sirius plan. The Wall Street Journal writes that "as one of five FCC commissioners, Mr. Copps will cast a vote on whether the Sirius-XM merger and Tribune sale should be allowed to proceed." Copps may want the satellite radio companies to give more guarantees on prices charged to consumers.

XM and Sirius stocks have both moved off lows as it appeared that approval for their merger looks more certain. The stocks are sill severely depressed. Copps comments may help push them down again.

While the satellite radio company merger may face more opposition than was anticipated recently, the firms still have a compelling argument about how competitive the marketplace is. They continue to lose money and, without some change in their structures, their debt loads could sink them. Perhaps someone will point that out to Copps.

Douglas A. McIntyre is a partner at 24/7 Wall St.

FCC comments cast doubt on Sirius (SIRI) merger with XM, Dow Jones deal originally appeared on BloggingStocks on Fri, 28 Sep 2007 06:14:00 EST. Please see our terms for use of feeds.

Continue reading Sirius (SIRI) and XM (XMSR) hit by a downgrade -- what now?

Sirius (SIRI) and XM (XMSR) hit by a downgrade -- what now? originally appeared on BloggingStocks on Wed, 19 Sep 2007 19:20:00 EST. Please see our terms for use of feeds.

XM Satellite earnings: Is subscriber growth enough? originally appeared on BloggingStocks on Thu, 26 Jul 2007 09:54:00 EST. Please see our terms for use of feeds.

Continue reading What do Whole Foods, Sirius and Borders have in common?

What do Whole Foods, Sirius and Borders have in common? originally appeared on BloggingStocks on Wed, 06 Jun 2007 11:23:00 EST. Please see our terms for use of feeds.

Audio content provider Audible Inc. (NASDAQ: ADBL) on May 3 posted 1Q 2007 earnings that finally begin to generate some noise. The company has signed up 72,000 new members in 1Q 2007 alone, although most of these were through an introductory membership offer that does not generate substantial cash flow. Net revenue for for the quarter was up 28% to $25.3 million compared to 1Q 2006, and up 9% from 4Q 2006. More importantly, (though not as nice sounding in print) is that the net loss for 1Q 2007 was half of the net loss for 1Q 2006, $1.2 million in 1Q 2007 vs. net loss of $3 million in 1Q 2006.

In part, the net loss number is due to higher operating costs as Audible Inc. has contracted alliances with more and more content partners to offer audio entertainment, and also more educational programming. Distance education is the fastest growing segment of the post-secondary education market, and Audible Inc. is trying to become the audio education content provider of choice for many distance education programs. Among Audible's audio content affiliates are Amazon.com (NASDAQ: AMZN), Apple Inc. (NASDAQ: AAPL), and XM Satellite Radio (NASDAQ: XMSR), as well as more than 420 other content providers of 130,000 hours of audio programming. Audio books and audio educational programming is a viable economic format, as partnerships with Apple show. Apple currently provides advertising for Audible and co-markets for new members.

Even given Audible's modest improvements, the stock would have been a decent investment. It is up over 20% this year. Patient value-investors may want to give Audible Inc. a once over in the near future before the stock begins to attract more attention. Since the beginning of the year, there have been a number of upgrades to buy.

Audible making noise with recent earnings originally appeared on BloggingStocks on Wed, 06 Jun 2007 11:10:00 EST. Please see our terms for use of feeds.

The short interests in both Sirius Satellite Radio (NASDAQ: SIRI) and XM Satellite Radio (NASDAQ: XMSR) fell in May. At Sirius, it dropped 29.1 million shares to 91.3 million. At XM, the decrease was 6.4 million shares to 24.5 million. Sirius had the biggest drop in shares sold short in May than any other stock traded on the Nasdaq.

The shorts have made a lot of money on the two satellite radio stocks this year, and perhaps they believe that at current prices they are not likely to go lower. A look at the pattern in share prices show that this might be true. On January 16, Sirius shares were $4.16. They now trade at $2.80 but have been fairly flat since late April, so perhaps they have found a bottom.

XM is also trading sideways after a big drop. On January 16, the stock closed at $17.14. It has dropped to under $12, about where it traded in mid-April.

The euphoria over the merger of the two companies has evaporated as the FCC and Congress have shown some resistance to approving the deal. They are concerned that it would create a monopoly, which would raise prices to consumers. In addition, the first quarter reports from both companies showed that they are still losing money and burdened with debt.

Perhaps both stocks have found a floor because if the shares went much lower there would be nothing left to trade.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Short sellers get tired of XM and Sirius originally appeared on BloggingStocks on Fri, 25 May 2007 09:45:00 EST. Please see our terms for use of feeds.

It's never good when a key member of Congress makes a negative comment about a merger, especially when it is aimed at the Justice Department and FCC.

Sen. Herb Kohl, the chairman of the Antitrust, Competition Policy and Consumer Rights Subcommittee, said that the merger of Sirius (NASDAQ: SIRI) and XM (NASDAQ: XMSR) would create a monopoly [subscription], plain and simple. In a letter to the two agencies he wrote that the combination "would cause substantial harm to competition and consumers, would be contrary to antitrust law and not in the public interest."

This is not the end of the merger, but it may be the beginning of the end. XM recently took its morning hosts, Opie and Anthony, off the air for lewd remarks. The move may have been taken so that the FCC would not feel that the merger would open the door to a business supported by off-color programming. Howard Stern, the shock jock, is the morning host at Sirius.

Sirius is still a fairly small business with big debts, In the last quarter, it had revenue of $204 million, slightly below Wall St. estimates. The company has over $1 billion in debt.

In other words, it may need the merger to stay viable.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Washington starts to sour on XM merger with Sirius originally appeared on BloggingStocks on Thu, 24 May 2007 09:00:00 EST. Please see our terms for use of feeds.

MOST NOTEWORTHY:

• Comcast Corp (NASDAQ: CMCSA) was upgraded at AG Edwards to Buy from Hold with a $33 objective, citing valuation.

• Gabelli raised Monster Worldwide's (NASDAQ: MNST) rating to Buy from Hold and sees an attractive long-term opportunity as near-term margin pressure issues are providing an opportunity.

• CIBC upgraded shares of Microsoft (NASDAQ: MSFT) to Sector Performer from Underperformer to reflect solid Q3 results and an improved 2008 outlook. Citigroup raised Microsoft's rating to Buy from Hold after the quarterly report.

• UBS upgraded both XM Satellite Radio (NASDAQ: XMSR) to Buy from Neutral citing improving fundamentals and Sirius Satellite Radio (NASDAQ: SIRI) to Buy from Neutral on better operational execution...

• Goldman upgraded NetGear, Inc (NASDAQ: NTGR) to Neutral from Sell.

• KLA-Tencor Corp (NASDAQ: KLAC) was raised to Neutral from Underperform at First Albany following positive Q3 results.

• Alaska Communications Systems Group, Inc (NASDAQ: ALSK) was upgraded to Hold from Sell at Stifel following its first quarter report.

• RBC Capital raised Baidu.com, Inc (NASDAQ: BIDU) to Outperform from Sector Perform citing guidance that indicated a reacceleration of underlying fundamentals.

• JP Morgan added Taser International, Inc (NASDAQ: TASR) to its SMID Money List and will maintain its Outperform rating.

Analyst upgrades 4-27-07: CMCSA, MNST, MSFT, SIRI and XMSR originally appeared on BloggingStocks on Fri, 27 Apr 2007 10:59:00 EST. Please see our terms for use of feeds.

By now I'm sure you are all familiar with the controversy surrounding remarks made by Don Imus on his radio show, where he referred to the ladies on the Rutgers basketball team as "nappy-headed hos." Amid calls for his dismissal from the National Organization for Women and activists like Al Sharpton, Imus has apologized profusely and received a 2-week suspension from the network. All of this got me to thinking: Would Imus's show be better-suited for satellite radio where he won't subject to the rule of the FCC, and have more freedom to make obnoxious, ill-advised comments that are offensive on a multitude of levels?

Howard Stern, who defected to Sirius for greater editorial freedom (and a few hundred million dollars, had this to say about Imus's apology: "He's apologizing like a guy who got his first broadcasting job. He should have said, "F**k you, it's a joke."

Continue reading Does Imus belong on satellite radio?

Does Imus belong on satellite radio? originally appeared on BloggingStocks on Wed, 11 Apr 2007 08:45:00 EST. Please see our terms for use of feeds.