Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : XM Satellite Radio Holdings Inc. (XMSR) -- Ignore unavailable to you. Want to Upgrade?

To: H James Morris who wrote (215)	1/4/2002 1:10:38 PM
From: Jim Spitz	Read Replies (1) \| Respond to of 3386

Article from FORBES: forbes.com Home > Business > Companies Communications Satellite Firms May Be Radio Fliers Mark Lewis, Forbes.com, 01.04.02, 11:55 AM ET NEW YORK - Satellite radio stocks have taken a beating this week, but next week could be a different story. XM Satellite Radio may announce year-end subscription numbers that reflect stronger-than-expected demand for this new product--and that encouraging news could send satellite radio shares back into orbit. XM (nasdaq: XMSR - news - people) uses satellites to beam 100 channels of specialized radio programming to its customers who buy the radios from firms such as Sony (nyse: SNE - news - people) and then pay XM about $10 per month for the service. Sirius Satellite Radio (nasdaq: SIRI - news - people) plans to begin offering a similar service next month. Both XM and Sirius fell sharply on Jan. 2, after Salomon Smith Barney analyst Armand Musey downgraded XM to neutral from outperform, saying the stock had become overvalued. Then on Jan. 3, a well-known Wall Street Journal personal technology columnist panned satellite car radios as overpriced and poorly designed. That negative review, combined with the news that Sirius will sell 16 million shares in a secondary offering, sent both these stocks tumbling again. But the stocks bounced back a bit this morning, and they may do better next week when both companies are due to make some interesting announcements at the Consumer Electronics Show in Las Vegas. XM is expected to release its year-end subscription numbers, "and based on the numbers that are leaking out now, XM has blown away expectations," says analyst Robert Saunders of Eastern Management Group, a consultant firm focused on the communications industry. After launching its service in November, XM had been expected to report about 10,500 subs--but the actual number may be 30,000 or more, Saunders says. If Sirius completes its national rollout by the end of 2002, the total number of subs for both firms may total 150,000 a year from now, the analyst adds. Sirius "has been kind of cagey" about its roll-out plans, he says, but more details will emerge next week at the Las Vegas conference. Another issue creating uncertainty for these stocks is that the two firms are tangling with the cell-phone industry, which has asked the Federal Communications Commission to force the satellite radio firms to limit the power of the land-based repeaters they use to supplement their satellite-based service. The cell-phone companies claim the firms' powerful repeaters might interfere with next-generation wireless services. But Saunders says the FCC is unlikely to do anything that would seriously harm the satellite radio firms. Saunders himself is an XM subscriber who loves the service, and he sees compelling evidence that satellite radio will quickly catch on with consumers: "I was already convinced, and what I've seen in the past four weeks or so shows me that the rest of the country is coming on board." If the news out of Las Vegas next week confirms this rosy view, then satellite radio shares will soon be airborne again.