XM marks Sirius' spot
Remember when Sirius and XM announced their plan to merge into one satellite radio juggernaut? If you do, you've got quite the memory -- they made the announcement 18 months ago. Well, after jumping through more hoops than a Westminster Kennel Club dog show, Sirius XM Radio (NASDAQ:SIRI) was born on Tuesday.
Is the market pumped? Not exactly. Sirius XM Radio is commanding roughly the same market cap that Sirius alone was fetching just before the merger was announced in February 2007.
Sirius and XM may be expanding their subscriber base -- now up to 18.6 million combined accounts and growing -- but the united broadcaster needs to pump up its believer base as well.
That won't be easy. Sirius XM has no problem selling the merits of its product. It's superior to commercial-saddled terrestrial radio, so listeners like it. Automakers love to promote it, because it's an add-on accessory that results in active subscriber royalties. Investors are tougher to win over, because they see the combined company's mounting deficits and imperfect balance sheet, but remain blind to the synergies. It's up to Sirius XM to win over the bears, which is never easy, unless satellite receivers come shaped like picnic baskets.
Briefly in the news
Let's take a quick look at some of the other stories that shaped our week:
- Amazon.com (NASDAQ:AMZN) launched a pair of merchant payment services, making it easier for e-tailing upstarts to incorporate Amazon's proven checkout system into their own sites. The new services don't seem like much of a threat to eBay's (NASDAQ:EBAY) PayPal, since they lack the consumer angle that has helped PayPal swell to nearly 63 million accounts. However, Amazon doesn't quit so easily. If any company can put up a worthy challenger to eBay's popular financial transaction service, it would be the master of online transactions.
- Merrill Lynch (NYSE:MER) is dumping $30 billion in mortgage-related assets and looking to raise liquidity by selling $8.5 billion in new stock. And you think you had a rough week?
- Commercial real estate isn't bad, it's just overdrawn that way. LoopNet (NASDAQ:LOOP) actually came through with healthy quarterly results, fueled by a 29% surge in revenue. The online commercial real estate marketplace is thriving in a tricky sector. In an encouraging sign, traffic is up, so at least folks are sniffing around the potential of purchasing commercial properties.
Until next week, I remain,
Rick Munarriz
