NEW YORK -- Sirius Satellite Radio shook investors this morning by cutting their 2007 forecast of total subscribers from 6.3 million down to a range of between 5.9 million and 6.1 million. Wall Street immediately punished the company, slicing some 7 percent off shares of Sirius and a slightly smaller hunk out of XM Satellite Radio shares for good measure.
XM battled back with a release saying GM would build 1.8 million vehicles with XM stereos next year, generating a modest feeling of stability for the company, which expects between 7.7 million and 8.2 million subscribers by the start of 2007.
Wonder if there might be a merger between the two?..
Even though it makes sense for many reasons, the two companies appear to still be holding off on such speculation. If XM (Major League Baseball, Opie and Anthony, Oprah) and Sirius (NFL, Howard Stern, Martha Stewart) are getting closer or further from a merger in 2007 will be foreshadowed in the coming weeks by final holiday sales numbers. The year-end period has grown to represent an important gauge of how XM and Sirius will fare in the coming year. If one emerges as a definite leader in the segment, the other's days as an independent firm may be numbered.
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