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

To: pcstel who wrote (2725)	7/25/2006 12:43:51 PM
From: i-node	Read Replies (1) \| Respond to of 3386

In 2005. XM spent over 485 MILLION Dollars on Marketing Expenses to acquire 2.7 million subscribers. At an average ARPU of 10.75 per month. 2.7 million subscribers paying the average ARPU rate of $10.75 yields ony 348 million in revenue over a 12 month period. This doesn't even include most of the operational costs (G&A), royalties, retention, billing, etc. If you can't market the product with 485 million dollars.. Then the question you have to start asking yourself is... It is a good point. Will these expense levels be typical? I think not. Will the OEM take rate get better or worse? We'll see. We operate, apparently, from two different assumptions -- I assume, expect, that there is sufficient market for the product to make the business model work. I believe this because I believe in the product from my own experience. But I could be wrong. You assume the market won't develop; i.e., they spent a half billion and only added 2.7M customers, therefore the business is a failure. At this point, I am less sure that the market will develop than I once was. But I still believe it will. I do believe XM has failed to make the best use of its marketing dollars, but I also believe that is about to change. Assuming you are right, when is the earliest date you envision one of these companies going into bankrtupcy? And how will the ARPU/CPGA/Churn situation change as a result of bankruptcy to make the stock of either company attractive to you (you did indicate you would be a buyer AFTER the reorganization)?