XM Gets the Boot

Is XM (Nasdaq: XMSR  ) the Rodney Dangerfield of Wall Street?

It's bad enough that the satellite radio provider has spent a grueling 10 months trying to get its merger with Sirius (Nasdaq: SIRI  ) approved; now it's also being kicked out of the Nasdaq-100 Index. Where's the respect for a pioneer?

It's the annual reshuffle for the popular secondary stocks barometer, and XM is one of five companies getting booted to make room for fresher names like Monster energy drink maker Hansen Natural (Nasdaq: HANS  ) .

Another notable addition is Focus Media (Nasdaq: FMCN  ) . Earlier this month, Baidu (Nasdaq: BIDU  ) broke the barrier by becoming the first Chinese stock to get inducted into the index. Focus Media, China's leader in display advertising, is now the second company hailing from the world's most populous country.

I jest, I suppose, but is it fair for XM to be deemed irrelevant relative to a fast-growing fizzy beverage maker or a company that powers a fleet of billboards, elevator ads, and spot-spewing television monitors?

This move isn't necessarily based on the stock's market cap. The shares have shed just 6% of their value this year. Neither does it mean that the index is turning its back on satellite radio as a whole, since Sirius will remain a component of the Nasdaq-100 next year.

It's still an embarrassing demotion. Things would have been so much easier if the merger with Sirius had been approved within a reasonable amount of time after it was initially announced back in February. At least then the Nasdaq-100 would have had to go to just one satellite radio constituent by default.

It didn't quite turn out that way, now did it? Instead, XM has to bow out, along with stocks -- like Ericsson (Nasdaq: ERIC  ) and Sepracor (Nasdaq: SEPR  ) -- that really have taken a beating this year.

Can XM make lemonade out of lemons, parlaying the demotion into yet another reason for regulators to approve the deal? I like your thinking, but that's the kind of lucky break that rarely visits the disrespected.

Read up on when XM commanded R-E-S-P-E-C-T:

Foolanthropy is now broadcasting a new message: financial education for young people. Click here to learn more about our new global initiative. 


Read/Post Comments (0) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 554912, ~/Articles/ArticleHandler.aspx, 4/21/2014 9:05:34 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

TREND TRACKER: Get Rich When the Web Goes Dark

It's time to say "goodbye" to your Internet! One bleeding-edge technology is about to put the World Wide Web to bed. And if you act right away, it could make you wildly rich. Experts are calling it the single largest business opportunity in the history of capitalism… The Economist is calling it "transformative"... but you'll probably just call it "how I made my millions." Big money is already on the move. Don't be too late to the party – find out the 1 stock to own when the Web goes dark.


Advertisement