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February 19, 2007 – Comments (2)

XM and Sirius to merge, confirmation just came through from WSJ (earlier rumors were citing "people familiar with the matter," and I tend to really have a hard time with those mysterious "people familiar with the matter")... It's funny how something that's ultimately not surprising can be so shocking when you first hear the news. Kind of like the tragic demise of Anna Nicole -- dying so young was a shocker, but on further thought, well... not so much.

Well it certainly should be interesting to have the most avid hate mailers of them all -- satellite radio shareholders -- join forces. Granted, they're not all bad but for the most part writing about XM or Sirius was usually an exercise in letting it all roll off your back in terms of burgeoning inbox of hate mail. (Of course, I haven't written about satellite radio as much recently, so maybe they've mended their ways. Not to mention this past year hasn't been great for either stock.) Gosh, now they will be united in common purpose. That's my first, most immediate thought -- of course there are bigger investing and business implications here. It's just sooo hard to get past that historical fan factor.

2 Comments – Post Your Own

#1) On February 19, 2007 at 8:13 PM, ElViking (96.32) wrote:

Do you think XM and Sirius will do any better combined as one as they did separately? I was really bearish on both individually, but assuming they can combine their respective strengths, there may be some hope for their future. By hope I mean "Market Perform" and by "Market Perform" I mean "Probably will have a huge jump on news of the merger followed by a long flatline."

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#2) On February 20, 2007 at 7:35 PM, TMFLomax (89.22) wrote:

How strange. I tried to reply to this earlier and it didn't go through. Hmm. Maybe I just previewed. But ElViking, I really like your definition of market perform here. ;)

I haven't thought *too* much about it, but some casual thoughts I had today were, that the arms race for advertising/talent to compete against one another (and the related costs) should be mitigated. As for regulatory/anti-trust issues, it seems to me they face so many more forms of competition since they started 10 or so years ago that it wouldn't be quite as monopolistic as it might seem... then again, who knows how regulators will look at it. I can see the logic behind the hook-up but I am still not sure I'd feel more bullish on these two merged together. Just some thoughts given the fact that I haven't done too much hard thinking about the whole thing. It's definitely interesting to ponder though and see what happens. And I have to say I'm glad I closed out my CAPS short on SIRI last week given today's jump! Phew. Talk about random luck. It looks like it only closed 6% higher today but still.

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