Shares of Sirius
- After winning Department of Justice approval last month, Sirius is now just one regulator head-nod away from completing its synergistic merger with XM
(NASDAQ:XMSR) . - It grew its subscriber base by 38% to 8.3 million subscribers last year, with revenue growing even faster.
- Losses continue to narrow, and Sirius achieved positive cash flow in the second half of 2007.
- The merger's completion would be another victory, since Sirius -- despite being the smaller company -- scored a merger of equals, installing its own CEO as the combined company's chieftain.
Still not moved by the peculiarity of Sirius shares getting trounced? OK, what if I told you that you had to go all the way back to September of 2004 -- just weeks before the announcement that Howard Stern was leaving Viacom
Back then, Sirius was watching over just 662,289 subscribers. It was a distant second-place entrant in an industry that few would have fathomed would top the 17.3 million mark today.
Before you argue that Sirius went on to put its investors through massive dilution, you'd be several quarters too late. Yes, the number of Sirius shares outstanding has increased over the past four years -- from more than 1.2 billion pre-Stern to nearly 1.5 billion today -- but the larger balance-sheet-restoring makeover happened well before its 2004 lows.
I'm not suggesting that Sirius is perfect. This is clearly a competitive marketplace, and even some of its automaker partners, like Ford
However, can anyone really say that there is more risk in Sirius today than there was at a similar market cap nearly four years ago? It was a speculation then. It's an opportunity now. Satellite radio has proven itself as a medium. Now it's time for it to prove itself as an investment.
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