No Sirius Payoff for Stern?

[Queasy]

D'oh!

Q: Sirius Satellite Radio's stock (SIRI) is down this year. Is it a good time to buy?

A: Every time there's a new and exciting technology, investors want to pile in. And for some reason, they seem to forget about the price they're paying, virtually guaranteeing themselves poor returns.

Satellite radio was a classic case. Shortly after the dot-com bust, investors looking for wild and exciting investment opportunities didn't lose any time investing in satellite radio. It seemed to have unlimited promise. And it didn't seem to matter that Sirius hadn't made a dime and analysts were torn on when, or if, profits would arrive.

The craze hit a new high when I received a reader question on Ask Matt about Sirius' stock on April 25, 2005, when it was trading for $5.14 a share. As you can read here, I cautioned investors that a "string of losses makes it impossible to perform a traditional valuation on the company." I quoted a Standard & Poor's stock research report, which rated the stock a "hold."

Turns out that was great advice. Since that story ran, the biggest winner on the stock has been shock jock Howard Stern, who was paid $100 million a year plus given the opportunity to cash in $191 million in stock. You can read about Stern's mega payday here.

What has happened to regular investors? The stock is trading around $4.45 a share. That's a 13% decline since April 2005. Interestingly, too, investors haven't cashed in on Stern, either. The stock is down 35% since he started on the air. Meanwhile, the company still loses money, making it impossible to value the stock using any standard method.

If you insist on investing in this stock, all I can tell you is to make sure you use money you can afford to lose.

 

[KarmaPolice]

/agree

 

[Don Vito Corleone]

In all fairness, XM stock is trading at 37% of its 52-week high. It seems a little arbitrary to pin this on Stern, whose arrival has increased Sirius' subscriber base by something like 500%.

 

[Tom]

When I first heard about this I thought who would be stupid enough to pay for radio ?

Then I realized there are people who pay money to make their phone ring a certain way..

 

[Mucho]

Paying for radio is a fad.

 

[Queasy]

I could probably justify paying for XM or Sirius if I were a truck driver or someone else that drives across the country all the time.

Nothing is worse than being out in the boonies and only being able to get crappy country or evangelical stations.

 

[robphelan]

my commute is only ~30 minutes each way, but it would be really hard to live w/o XM now that i've had it for 2 years. it's really nice to be able to listen to news anytime i want to.

i might not feel the same if i had to pay full price for the subscription, though.

 

[NeoV]

XM and Sirius should combine to unite their user-base, market isn't big enough for both right now

 

[DrPizza]

Originally posted by: Mucho
Paying for radio is a fad.

No, it's a combination of three things:
1. fad
2. people too stupid to program their buttons on the radio so that when a commercial comes on, they can simply go to another station
3. people too lazy to simply record cd's of the music they enjoy to listen to on their commute

 

[CrackRabbit]

Originally posted by: DrPizza

Originally posted by: Mucho
Paying for radio is a fad.

No, it's a combination of three things:
1. fad
2. people too stupid to program their buttons on the radio so that when a commercial comes on, they can simply go to another station
3. people too lazy to simply record cd's of the music they enjoy to listen to on their commute


Number two doesn't always work any more. I have noticed more and more that similar stations will have syncronised breaks, but that does still leave putting your music on a CD

 

[kranky]

Originally posted by: DonVito
In all fairness, XM stock is trading at 37% of its 52-week high. It seems a little arbitrary to pin this on Stern, whose arrival has increased Sirius' subscriber base by something like 500%.

It's certainly not Stern's fault, but unfortunately for Sirius the huge growth in their subscriber base still hasn't made them profitable. I think the easy gains are in the past and they are going to have a tough time growing much larger. Whether they can figure out how to turn a profit is the question.

 

[AUMM]

Originally posted by: DrPizza

Originally posted by: Mucho
Paying for radio is a fad.

No, it's a combination of three things:
1. fad
2. people too stupid to program their buttons on the radio so that when a commercial comes on, they can simply go to another station
3. people too lazy to simply record cd's of the music they enjoy to listen to on their commute

it's called convenience...

 

[KarmaPolice]

Originally posted by: DrPizza

Originally posted by: Mucho
Paying for radio is a fad.

No, it's a combination of three things:
1. fad
2. people too stupid to program their buttons on the radio so that when a commercial comes on, they can simply go to another station
3. people too lazy to simply record cd's of the music they enjoy to listen to on their commute

You need to try it before you get it...I have it for many reasons.

1. LONG trips where you want to hear NEW music..with BETTER quatliy, and NONSTOP..no trying to find a channel in the middle fo no where to fit your musical tastes
2. BASEBALL. I can listen to ANY game I want to.
3. Comedy..You cant get comedy channels on regular radio..

 

[foghorn67]

Originally posted by: DrPizza

Originally posted by: Mucho
Paying for radio is a fad.

No, it's a combination of three things:
1. fad
2. people too stupid to program their buttons on the radio so that when a commercial comes on, they can simply go to another station
3. people too lazy to simply record cd's of the music they enjoy to listen to on their commute

You're dumb and ignorant.
1-It's not a fad to people in long commutes.
2-If you haven't noticed, FM went to crap. Around here, half the stations are Espanol, and the others are have synchrnonized their commercials, and they are friggin like 6-10 minutes long. And no, we aren't too stupid to program stations, we have over a hundred. By that rationale, we are smarter.
3-people don't want to waste money on cd's when only one good hit is on there. Not a matter of laziness. It's a matter of taste.

 

[herbiehancock]

Originally posted by: kranky

Originally posted by: DonVito
In all fairness, XM stock is trading at 37% of its 52-week high. It seems a little arbitrary to pin this on Stern, whose arrival has increased Sirius' subscriber base by something like 500%.

It's certainly not Stern's fault, but unfortunately for Sirius the huge growth in their subscriber base still hasn't made them profitable. I think the easy gains are in the past and they are going to have a tough time growing much larger. Whether they can figure out how to turn a profit is the question.

On a side note, Sirius's CEO has expressed an interest in acquiring XM. Of course, he did cite regulatory approval as one stumbling block and also the high cost of acquiring their rival as another. I bet the second is the bigger hurdle........

 

[LikeLinus]

Originally posted by: KarmaPolice

Originally posted by: DrPizza

Originally posted by: Mucho
Paying for radio is a fad.

No, it's a combination of three things:
1. fad
2. people too stupid to program their buttons on the radio so that when a commercial comes on, they can simply go to another station
3. people too lazy to simply record cd's of the music they enjoy to listen to on their commute

You need to try it before you get it...I have it for many reasons.

1. LONG trips where you want to hear NEW music..with BETTER quatliy, and NONSTOP..no trying to find a channel in the middle fo no where to fit your musical tastes
2. BASEBALL. I can listen to ANY game I want to.
3. Comedy..You cant get comedy channels on regular radio..

Making BOLD comments does NOT make your POINT any MORE valid or you SEEM any more INTELLIGENT.

Personally I would never pay for radio. Why the hell do I want to their their "selected" new music. Get an in-dash CD player that plays MP3's and be done with it!

I was just listening to the Sirius stations that were on my Sprint Power Vision and I was like "wtf, most of this music sucks". Just because its commercial free and better quality, does not make it better overall. It's still someone picking your music for you.

 

[halik]

I think they overestimated the amount of new subscribers Stern was supposed to bring, especially considering they're paying him $500mil over the course of 5 years.

 

[TimMyMac]

I do know a few people who stopped listening to Siruis because of Stern. If that's what they want to do to get viewers I'm not interested either. Granted we are the minority and the gain greatly outnumbered the loss.

 

[Trey22]

Good.

 

[CPA]

Originally posted by: DonVito
In all fairness, XM stock is trading at 37% of its 52-week high. It seems a little arbitrary to pin this on Stern, whose arrival has increased Sirius' subscriber base by something like 500%.

Are you sure about that? I thought that was the expected increase, but it has been much, much less than that.

 

[CPA]

Originally posted by: LikeLinus

Originally posted by: KarmaPolice

Originally posted by: DrPizza

Originally posted by: Mucho
Paying for radio is a fad.

No, it's a combination of three things:
1. fad
2. people too stupid to program their buttons on the radio so that when a commercial comes on, they can simply go to another station
3. people too lazy to simply record cd's of the music they enjoy to listen to on their commute

You need to try it before you get it...I have it for many reasons.

1. LONG trips where you want to hear NEW music..with BETTER quatliy, and NONSTOP..no trying to find a channel in the middle fo no where to fit your musical tastes
2. BASEBALL. I can listen to ANY game I want to.
3. Comedy..You cant get comedy channels on regular radio..

Making BOLD comments does NOT make your POINT any MORE valid or you SEEM any more INTELLIGENT.

Personally I would never pay for radio. Why the hell do I want to their their "selected" new music. Get an in-dash CD player that plays MP3's and be done with it!

I was just listening to the Sirius stations that were on my Sprint Power Vision and I was like "wtf, most of this music sucks". Just because its commercial free and better quality, does not make it better overall. It's still someone picking your music for you.

It's not just about music. I have Serius and I love it. I don't care if they pick music for me. If anything, that's a positive because they will play stuff I've never heard. And you don't hear the same 15 songs played over and over. But, if I don't want to listen to music I can get ESPN radio (not all markets have it on FM), NFL radio, college sports, comedies, all of the political channels, etc.

 

[LikeLinus]

Originally posted by: CPA

Originally posted by: LikeLinus

Originally posted by: KarmaPolice

Originally posted by: DrPizza

Originally posted by: Mucho
Paying for radio is a fad.

No, it's a combination of three things:
1. fad
2. people too stupid to program their buttons on the radio so that when a commercial comes on, they can simply go to another station
3. people too lazy to simply record cd's of the music they enjoy to listen to on their commute

You need to try it before you get it...I have it for many reasons.

1. LONG trips where you want to hear NEW music..with BETTER quatliy, and NONSTOP..no trying to find a channel in the middle fo no where to fit your musical tastes
2. BASEBALL. I can listen to ANY game I want to.
3. Comedy..You cant get comedy channels on regular radio..

Making BOLD comments does NOT make your POINT any MORE valid or you SEEM any more INTELLIGENT.

Personally I would never pay for radio. Why the hell do I want to their their "selected" new music. Get an in-dash CD player that plays MP3's and be done with it!

I was just listening to the Sirius stations that were on my Sprint Power Vision and I was like "wtf, most of this music sucks". Just because its commercial free and better quality, does not make it better overall. It's still someone picking your music for you.

It's not just about music. I have Serius and I love it. I don't care if they pick music for me. If anything, that's a positive because they will play stuff I've never heard. And you don't hear the same 15 songs played over and over. But, if I don't want to listen to music I can get ESPN radio (not all markets have it on FM), NFL radio, college sports, comedies, all of the political channels, etc.

I don't drive enough to care and if you have an MP3 CD player, it's well over 15 songs that you can use. I just have something like Yahoo Unlimited where I can download all the music I want for $4.99 a month and listen to it anywhere. Plus they have suggestions of artist based on "more mainstream or less mainstream".

We have ESPN on FM here in Nashville. I don't need to hear Mike and Mike any better than they already are..lol.

I'm sure some people love it...i'm just saying I would never personally pay for the radio.

 

[Sheep]

Originally posted by: Mucho
Paying for radio is a fad.

So is paying for television, yet 70% of people in the U.S. do it. Oh, and enjoy your 20 minutes of commercials per hour on FM. :disgust:

Satellite radio has a better selection of music than FM could ever hope for in their wildest dreams. Sure you can get an MP3 player, but that doesn't exactly allow you to hear new music by itself. For the price of a cheap satellite tuner (<$100 with a car kit in most cases) and the price of a CD each month, I get something that enables me to hear a ton of new music which makes my one hour each way commute a ton more bearable.

 

[GrammatonJP]

interesting.. intc has been down to 18 from 26/27.. thats also 30%...

i'm pretty sure the whole market has been resetted.. 30% down across the board.. not just siri.

 

[Tom]

Originally posted by: Sheep

Originally posted by: Mucho
Paying for radio is a fad.

So is paying for television, yet 70% of people in the U.S. do it. Oh, and enjoy your 20 minutes of commercials per hour on FM. :disgust:

Satellite radio has a better selection of music than FM could ever hope for in their wildest dreams. Sure you can get an MP3 player, but that doesn't exactly allow you to hear new music by itself. For the price of a cheap satellite tuner (<$100 with a car kit in most cases) and the price of a CD each month, I get something that enables me to hear a ton of new music which makes my one hour each way commute a ton more bearable.

What if there's a tornado ? Does satellite radio give you warnings ?

Or other local info like an overturned tanker truck ?