The Stock Spotlight: Sirius Satellite Radio

By Marc Feala

This edition of The Stock Spotlight will feature Sirius Satellite Radio.  Sirius has been in the news with talks on merger with XM Satellite Radio.  Before we touch on what is now with this stock, we must know more about it.

Sirius Satellite Radio is a leader in satellite entertainment, offering over 100 channels of commercial free music and genres such as, sports, talk, weather, traffic, news, country, rap, Latin, classic, rock, and pop.  The company offers units for use in the home, office, automobile, and on the computer through Sirius Internet Radio.  Sirius is headquartered in New York City and employs 772 employees.

Sirius has made headlines with the talk of their merger with XM Satellite Radio, which is under review by the Federal Communication Commission (FCC).  When the two satellite providers were conceived, both agreed to never merge.  With the growing number of alternative radio options, such as MP3 players and HD Radio, Sirius and XM are experiencing mounting financial pressures from the increased competition.  The worry from the FCC is this merger would hurt consumers by higher prices, but Sirius counters that consumers would benefit from a stronger company that could offer cheaper prices and optional programming.  Sirius’ voice is joined by major auto manufacturers and retailers.

“Based on our longstanding expertise in both the home and car audio entertainment business, we strongly believe that this merger will be beneficial to consumers.  In fact, we believe that it is critical for the continued growth of this medium.”

-William G. Crutchfield Jr., CEO and Founder, Crutchfield Corporation in September 19, 2007 article on www.cnnmmoney.com

 “We are informed that as a result of the proposed merger satellite radio customers will be able to select packages of fewer channels at lower prices.  If these enhanced options in fact become available, satellite radio subscribers stand to benefit as entertainment choices would increase and overall pricing would become more affordable.”   

-George S. Cary and Michael R. Lazerwitz, [on behalf of] Toyota Motor Corporation in September 19, 2007 article on www.cnnmmoney.com