Satellite Radio: Clear Growth, Far-Off Profits

[Chris Blount]

Investments in outer space don't pay off? Try telling that to shareholders of the two companies licensed to beam down radio programming from way up there: Sirius Satellite Radio (SIRI ) and XM Satellite Radio Holdings (XMSR ). Their shares have soared into high orbit, and the market has been lapping up fresh offerings of their shares.

To see why, you need only check satellite radio's growth. This time last year, XM counted 360,000 subscribers. Now it has nearly 1.4 million. Sirius, which got a later start, saw its subscribership in 2003 swell 772%, to 261,061. Bulls expect such out-of-sight gains are merely a start, figuring that some sizable chunk of America's 100 million households, 200 million cars, and millions more trucks, boats, recreational vehicles, trains, jets, stores, and offices one day will be tuning in news, weather, sports, and talk shows, plus commercial-free music, via XM for $9.99 a month or Sirius for $12.95.

MORE (http://www.businessweek.com/magazine/content/04_05/b3868129_mz026.htm)

[BobMurdoch]

I bought stock in both for my kids college fund. They've tanked a bit over the last few weeks, but I expect they will be back once the year is out. It can only get better as XM goes commercial free Sunday and gets local traffic and weather in a month, while Sirius adds NFL and other sports simulcasts this year.

[Richard King]

Dumbo here just sold 2/3 of his Sirius today, near the low of the day. I still have some of both too though. By the way, I just sent in my paperwork today for a Sirius dealership. We shall see what happens.

[BobMurdoch]

Dumbo here just sold 2/3 of his Sirius today, near the low of the day. I still have some of both too though. By the way, I just sent in my paperwork today for a Sirius dealership. We shall see what happens.
It seems like the bears are assaulting the two satellite radio stocks this month, but the future just looks too damn bright. Sirius will have the NFL reeling them in, while XMs move to commercial free and their adding of local traffic and weather for the top 20 markets will get them moving as well. Add in the fact that these two have the market all to themselves and things are looking rosy. They both seem to have plenty of cash on hand with some recent stock offerings that were readily snatched up, so the cash burn rate isn't a problem.

I feel your pain though, I bought SIRI in two batches. One I got at $2.25 a share in December, and the other at $3.80 (ouch) when it looked like it was taking off earlier in the month. Oh well, I'm only dealing with small numbers (about $1500)