SIRIUS XM Radio Inc. (NASDAQ: SIRI) is down again this morning after having recently hit a high of $1.44. The first drop had been a mixed market and profit taking after such a large move in the stock. Valuations were also getting high as the stock approached that $1.50 level. Now there is yet another article that talks about the Howard Contract contract negotiations.
Bloomberg reported that Mel Karmazin still has no deal and is exploring alternatives if there is a post-Stern SIRIUS XM.
We have contemplated the ‘life without Stern’ model for SIRIUS before today and earlier in the year. On the surface there feels like much time left. In reality the end of 2010 is counting down faster than you can count. Howard Stern is a huge part of SIRIUS XM. If no agreement is reached, it seems as though Stern would probably not be replaced. Our bet is that SIRIUS XM would hype up more of its other services for clients.
Shares closed at $1.38 on Monday and the stock is indicated down 1% Tuesday at $1.36. The 52-week range is now $0.56 to $1.44.
JON C. OGG