To: i-node who wrote (337 ) 11/18/2002 7:40:34 PM From: verdad Read Replies (1) | Respond to Revenue for XMSR has improved from $1k per qtr to $5.8 million (3Q 2002); however, consolidated net losses have increased from $60 million to $114 million (3Q 2001 to 3Q 2002). Total subscribers has increased 64,836 for the qtr. Impressive growth percentage; however, the cost of adding a subscriber seems to be somewhere around $217 per sub. The revenue each sub is currently contributing is somewhere around $111 per year. Assuming XMSR is able to decrease their overhead by 50% and continue adding subscribers at 64,836 per qtr, then they might only lose $51 million in 2003. Again, with the cost of adding subs, losses will increase with the number of subscribers added (i.e. a business model that loses money will only lose more money if duplicated). None of this analysis thusfar addresses the $450 million of debt that must be dealt with. Given the cost of adding subscribers and the current overhead of the business, one might wonder why GM or others would want to continue funding this venture. Other competitors in this arena have failed, indicating a market that may not exist. Another worrisome matter was the disclaimer regarding "consolidated EBITDA losses" that was attached to XMSR's THIRD QTR 2002 FINANCIAL RESULTS PRESS RELEASE:
