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Technology Stocks : XM Satellite Radio Holdings Inc. (XMSR)
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To: pcstel who wrote (2227)2/17/2006 3:29:31 PM
From: DaveMG  Read Replies (2) of 3386
 
I really think you're splitting hairs and this issue is not going to determine the failure or success of the model, or investor appetite for the stock.. They said on the call 54% become paying subs. Whether or not they are counted as subs when they're on the trial period does not affect the long term trend in any way whatsoever. I made my own simplistic spreadsheet more than 2 yrs ago and checked it yesterday. I had modeled 5.5 million subs at year end 05, annual revenues of 550 million,very close to what actually happened. Where I got it wrong was that I assumed 750 million in expenses. I will now start to model 1 billion going forward which pushes cashflow breakeven out a year or so.It doesn't seem that hard to model this stuff.

As I said, the 2 main questions are how many subs will they achieve and at what uptake rate, and where are costs going? You're not saying anything about these questions, though they are speculative in nature.

Wall ST analysts don't like it when something happens outside their models which is why they're now downgrading the stock, Of course valuation at this point is a rightly a moving target given the losses/lack of earnings, so we end up with a barometer of market mood.But these things in and of themselves don't mean anything either. I remeber in 1998 when QCOM's entire enterprise value was 3 billion and NOK and ERICY were spending their time bashing the company and claiming they invented CDMA, when they should have just bought them up. QC now earns almost that much money every year..
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