This just in on the wires re SIRI:
07:23 SIRI Sirius Satellite downgraded at Bear Stearns (9.01 ) -- Update --
Bear Stearns downgrades SIRI to Peer Perform from Outperform based on valuation. While there have been many accomplishments, firm thinks the mkt may currently be a little ahead of itself, as SIRI now trades at 20% premium their tgt of $7.50. Furthermore, the stock trades at a premium to XMSR (which is about 1 year ahead of Sirius in its rollout), and also trades at a premium to where DISH traded when it was in this stage of development.
07:17 SIRI Sirius Satellite may be heading for dog days - WSJ column (9.01 )
The WSJ's "Long & Short" column discusses Sirius Satellite, named after the brightest star in the sky, which is fitting. The co has seen its stock rise 340% since mid-August, mainly after the Oct signing of a 5-year contract to carry the musings of Howard Stern. Mr. Stern paved the way for Mel Karmazin to come aboard as the CEO. Rabid cult-shareholders have taken this to mean that satellite radio is finally legitimate. They are right, in the sense that satellite radio will survive in some fashion. But the real lesson from Sirius Satellite's binge is that content remains the real king of media. By overpaying for Mr. Stern and for its earlier agreement to carry NFL games, Sirius has started to crush its own windpipe. Sirius's CFO, David Frear, says the co will break even on the first 1 mln subscribers Mr. Stern generates. That seems overly optimistic. Also, the valuations of the stock make about as much sense as nudity on the radio. The mkt value today assumes that Sirius will reach 45 mln subscribers. Today it has around 800K. With a mkt cap of almost $16 bln, the mkt is valuing Sirius as if it reaches already 45 mln subscribers all by its lonesome, on generous unit economics. |
