XM Satellite Radio Holdings Inc. (XMSR) Message Board

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Technology Stocks : XM Satellite Radio Holdings Inc. (XMSR)

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To: verdad who wrote (332)	11/18/2002 5:58:33 PM
From: i-node	Read Replies (1) of 3386

In this environment, do you really think they'll be able to drum up $250 million in financial support and talk GM into deferring $200 million in payments? If so, why? Of course. GM isn't going to stand by and watch XM go down the tubes. It is obvious the business is a big winner -- they just need operating capital for a couple years. Look at the way Amazon.com has been funded while not turning a profit, and having NO HOPE of turning a profit in the forseeable future. $250M in funding will get them through 2nd or 3rd qtr next year, by which time they'll be bringing in $30-40M/qtr in revenue, at which time they begin approach break even cash flow (not quite -- but $60M/qtr, which should be attained by the end of '03, would do it). Bottom line: Success is obvious, cost (to GM) is minimal, GM already has an investment in XM as well as in their infrastructure to support installation/sale of the radios. Also, Delphi, Pioneer, and Sony all have substantial interests in seeing it success, so a consortium of some kind is easily workable. There is zero doubt about XM's ability to get the money they need.

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