Herb Greenberg over a MarketWatch has an interesting theory. The XM (XMSR) merger with Sirius (SIRI) may be a move of desperation given the large number of competitors in the market. He quotes this comment from the press release about the merger: "In addition to existing competition from free ‘over-the-air’ AM and FM radio as well as iPods and mobile phone streaming, satellite radio will face new challenges from the rapid growth of HD Radio, Internet radio and next generation wireless technologies."
And, perhaps the market itself is signaling a critical truth about the deal. Sirius stock is up only 7% on the news and still trades below $4 at 10.40 AM New York time. In December of 2004, the stock was above $8.
Maybe the deal will only buy time for a business model that has become flawed as competition enters the market.
The price of the stock seems to be saying so.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
Take This Retirement Quiz To Get Matched With An Advisor Now (Sponsored)
Are you ready for retirement? Planning for retirement can be overwhelming, that’s why it could be a good idea to speak to a fiduciary financial advisor about your goals today.
Start by taking this retirement quiz right here from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes. Smart Asset is now matching over 50,000 people a month.
Click here now to get started.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.