Shares of XM Satellite Radio (NASDAQ:XMSR) and Sirius Satellite Radio (NASDAQ:SIRI) were trading as much as roughly 20% lower today, after Goldman Sachs analyst Mark Wienkes slashed his price targets on the satellite-radio operators.

Wienkes has cooled on the sector in recent months. He downgraded shares of XM back in December, rightfully pointing out that concessions and financing hurdles would have to be cleared even if the deal won regulatory approval.

Two months later, he was still bearish -- with sell ratings on both stocks -- yet suggested that approval delays make the deal more likely to go through. He was right again. The Department of Justice gave the deal its blessing a month later. The FCC is heading in that direction, with a few reasonable concession requests.

That brings us to this morning, where Wienkes is slapping on the bear fur thick. His six-month share-price target on Sirius is being cut from $2.25 to $1.75. XM is getting a bigger skinning, with his price target slashed to $6.50 from the previous $11.50 mark.

More than just hibernation
Wienkes has been a vocal bear in the analyst community, but the math behind the new price targets hints that a merger -- in his opinion, at least -- is not a foregone conclusion.

When XM and Sirius announced their "merger of equals" 16 months ago, terms stipulated that XM investors would receive 4.6 shares of Sirius for every share owned. In other words, if Sirius is worth $1.75 by the end of the year as Wienkes suggests, shouldn't the XM price target be 4.6 times that, or $8.05?

The final FCC decision could be completed in as little as three weeks. Financing won't be a cakewalk, but you have major sporting leagues, record companies, and automakers General Motors (NYSE:GM) and Ford (NYSE:F) relying on satellite radio for incremental revenue. They're not the most financially stable group of cheerleaders, but they're not going to let the deal fall apart.

In other words, the deal should close later this year. XM has always traded at a slight discount to the merger's exchange ratio -- a suggestion both of deal uncertainty and that XM needs the merger more than Sirius does -- but Wienkes' new price targets are grim.

As time goes by
There is collateral damage in regulatory oversight. How many people die as drugmakers go through several stages of clinical trials before the FDA approves a lifesaving cure? The flipside is that a lack of regulatory oversight also kills, going by the laundry list of recent lead paint-related toy recalls.

But if Wienkes is right, and XM and Sirius are worth substantially less in the coming months than they were when the merger deal was first announced, won't the blood be on regulators' hands?

Maybe not. Wienkes has been bearish for a long time. Just because he has been on the money in the past, that doesn't mean he'll always nail the future.

Wienkes is worried about the trends. The country's youths are turning to their portable MP3 players for aural consumption. Rate caps and new low-priced plans will eat into per-capita subscription revenue.

He's not exactly wrong, but he's not entirely right, either. Did you see Apple's (NASDAQ:AAPL) last quarterly report? Year-over-year iPod unit sales inched just 1% higher. Macs and iPhones are the new workhorses at Apple. 

I agree that there are way too many appliances out there competing for human ears these days. The future is not a slam dunk for the satellite-radio industry. The problem is that Wienkes assumes that a seemingly moribund XM and Sirius as standalone companies -- at least on the retail side -- will remain that way after the merger is completed.

Other analysts see billions in realized synergies, enough to turn problematic financial statements into healthy generators of cash flow.

I see two companies coming together as one, working on a unified marketing message and with market-widening value propositions for consumers. I see incremental revenue streams -- from online advertising to digital downloads to new sponsorship opportunities -- where XM and Sirius are barely scratching the surface.

I've been wrong about Wienkes being wrong before. I may be wrong again. However, I think he's biting off more than a bear can chew this time. He is treating tomorrow's Sirius-XM as if it were today's Sirius and XM.

Big mistake.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.