Stocks: (SIRI)(XMSR)
After months of indicating that it was growing rapidly and its rival XM was not, Sirius has revised its year-end subscriber projections down from 6.3 million to a range of 5.9 million to 6.1 million.
The disclosure comes at an ugly time for the satellite radio busines which is hoping to show that both XM and Sirius may be cash-flow positive for the fourth quarter.
The two satellite radio firms are already battling low stock prices and the perception that a come-back in over-the-air radio and competition from products like the iPod have permanently slowed their growth.Sirius is trading at $4.17, and the news could move it closer to it 52-week low of $3.60.
Whatever the cause, and it may be that there are several, it is not clear that satellite radio is unlikely to fulfill its initial promise of being a technology that will eventuall be in tens of millions of cars.
The companies, and their investors, will have to settle for much less.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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