If Sirius merges with XM Radio will the stock go up?

Question

What will be the effect?

Answer 1

A merged XM/Sirius will still have problems.

Still have problems spending lots of money to acquire and retain subscribers. Heck, they've floated the idea of lowering rates to make the merger more palatable. That's money off the income stream. Will they be able to acquire enough subscribers to offset that?

Still have the baggage of having to pay for overpriced talent (that means you, Howard Stern) and programming (NFL, MLB, NASCAR).

The competition is still commercial radio, especially with the emergence of digital radio (HD Radio), which has no ongoing fees like satellite radio.

What may save XM/Sirius is if they move their brand onto the Internet, either through cobranding material (e.g., AOL Radio) or on their own.

Unless you're a rabid fan or someone willing to play Vegas w/ your investment money, I'd stay away from this for awhile.

Answer 2

It is supposed to be that XM shareholders will get something like 4.26 shares of Sirius and Sirius shareholders will also see a gain.

Here's the thing. As things are going eventually internet access, radio stations and video on a portable device is going to happen and be demanded by people. The only way to deliver that everywhere is going to be by satellite.

The first company to be able to deliver that or cobrand with another company that has content will win. That is why all eyes are on this merger. Apple wants to do this with Ipods and it would be far cheaper for them to buy the new company than start fresh.

Another factor is the fact that the new company would like to do a thing where you just pay for the channels you want or need. Something the cable TV companies are deathly afraid of. The name that comes up over and over is the big names that both companies paid way to much for. In fact they have released a press report saying that subscribers will not have to pay for what people deem offensive. Of course Howard Stern comes to mind. This seems to be the big anchor from the merger happening. Joe and Martha in middle america could care less about Stern or Oprah.

The only opposition seems to be mostly democrats in the house and senate and all others are quiet because it is a way more complicated issue than is being put out.

Right now most of the stock anylists put the stock as a "hold". Don't sell or buy if one has some stocks. This does not happen very often because it is a wait and see thing. Either it will crash or be great. But since Sirius is at $3 something there is no harm in buying just a little.

Answer 3

The announcement replaced into created from the merger already, so shares have replaced slightly already, (verify out tuesday of final week 2-20-07) My suggestion is to stay out of it. shares of Sirius are down low, and is the reason the prefer of the merger. The CEO of Sirius replaced into on Howard Stern this morning and defined that they don't look to be finding to strengthen the month-to-month costs of having provider. no count the way you verify out it, the two businesses are working at a loss, so it would be an fairly long-term technique to have the shares make severe funds. in case you prefer a rapid turnaround on the shares and are not arranged to watch for quite a few years, do not purchase them.

Answer 4

Well, the two will probably be in better shape than they are now; they are both in pretty bad shape loaded down with debt. Share holder equity is fanciable dream. Earnings if any ever do occur will be in the non foreseeable future.

Of course with speculators those things mean nought. It might go up. I seem to recall a company be the name of Global Crossing. One time it sold at a very high price based only on speculators' dreams. Only one of many.

Answer 5

XM will go up and Sirius will go down.

Answer 6

Probably not.
They are both losing tremendous amounts of money.
The future of satellite radio is weak.
They are basing their future on narrowcasting.
Their main compettion is the internet and it's a pull medium not push.
Think IPODs.