What’s Dragging Sirius XM (SIRI) Down?
The government has officially told the crying American’s that enough is enough. Which in the end, will leave better car companies that can actually compete without the government giving them billions every month. We have not fully seen how involved the government will be in the bankruptcy. But with the way the government has been handling these affairs, I am guessing they will be completely involved with Barney Frank leading the charge.
We have all seen companies get torn apart by others, but how will the federal government go at it? Will there be a split into smaller companies?
We have been covering Sirius XM Radio ( NASDAQ:SIRI ) a great deal here, as it is a very hot penny stock. The stock that everybody talked about at the golf club telling you to buy at 3.00, well now it is actually doing something. Sirius XM was down yesterday in part because of the news over government motors. This will only drag the stock down short term, and may actually help the company renegotiate in a positive way. Sirius XM was providing lots of revenue to a company, that was not getting any on their own. Most of the auto companies now, get 50% of all revenue on subscriptions, this could change to a much smaller amount as there are no longer two companies to compete for the deal. (Sirius, and XM)
Sirius XM’s biggest issue, is when contracts expire with their content partners, making deals that are more beneficial to Sirius XM. The reason Sirius XM is afraid to cross into the internet, is because their internet package only contains channels they have the rights to. They cannot Broadcast MLB games, NBA games, NFL games, over the internet. Luckily, for Sirius XM, the music is incredible and typically much better than an Ipod collection. Sirius XM for the I-phone will be marketed to techies in their twenties who love music, have a job, and like to watch games not listen to them.
Position: Long SIRIUS (NASDAQ:SIRI) www.TradeKing.com
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Comment by Bigt on 31 March 2009:
Im sure I’ll be dead, bankrupt or homeless before sirius ever reaches a dollar but miracles do happen so lets keep hoping. In the meantime Check out extrachange4life.com EXTRACHANGEFORLIFE.COM Cool story and helped me make back a few bucks I lost listening to those guys at the golf club.