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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: shades who wrote (63266)	5/4/2005 3:59:04 AM
From: energyplay	Read Replies (3) \| Respond to of 74559

Shorting Sirius and/or XM - Just remember these stocks have an emoitional following, like Taser, Krispy Kreme Doughnuts, Rambus, Dell all the way back to Iomega. Krispy Kreme, KKD has made a great short the past year or so - but it killed shorts for about 2-3 years. Took the Atkins diet, another fad type concept - to put it down. I have puts on Dell. The fad / hope / romance is gone, which makes it much safer. Also, all the interest in Apple (a reborn fad stock, except they might make real money now) will take attention away from Dell. ******** Also with the Satellite radios - the car makers get a slice of the subscription revenues, so they will put them in almost every car except the cheapest, and throw in the first year free. If you live near Marfa, Texas or Ridgecrest, California or YeeHaw Junction, Florida and you get a car and find you can get NPR or financial news or Art Bell or Rap which you could not get before, you might find it worth while to keep. My guess is as the subscriber base expands to millions, XM and Sirius will be able to cut the price of "basic service" to only a few bucks a month - a price where it will be worth it to enough folks to keep it. They will charge more for premium channels - financial news, sports events, risque (read : potty mouth) DJs, etc. The marginal cost of adding customers is very low - maybe $4.00 on top of the credit card transaction cost for the sign up, maybe under $1.00 for the out years. Outside of the physical equipment installation, WHICH THE CUSTOMER or auto maker pays for, there is no limit on how fast satellite radio can grow. If the credit cards could be processed fast enough, you could 50 million subscribers to either system in 3 weeks. All that subscription cost would be recovered in the first 2 months....leaving a river of gravy as wide as the Mississisppi River.... >>>The above picth is what you will be fighting. Some of it is true. Wait until you here about problems with renewal rates... Renewal rates were low for some factory installed systems. Most systems have been installed aftermarket, bought at Circuit City or some other auto sound store. Those buyers know what satellite radio is and they are driven to have it installed, so they tend to renew. *** Different point on Sirius vs. XM - Sirius has their satellites hang out at a higher effective latitude than XM, which could make Sirius much better for Canada. *****