This was interesting about XM. Still think it will come down to bandwidth. That is the highway all these Media Companies have to travel.
XM holds approximately 1.5 million shares still, however XM had been writing it down quite a bit. I think the value of it was less than $3 million on XM's books.
XM purchased the shares (and got some warrants too) in a complex deal when WRSP did their IPO. In exchange for XM buying in to the IPO... WRSP gave up their rights to 4 music channels worth of bandwidth that WRSP was entitled to... as well as rights to royalties that WRSP had in XM. These items go back to the early days of Mobile Satellite Radio, when WRSP owned big portions of XM -- when they sold out, they retained the rights to a portion of XM bandwidth and royalty payments, since XM used their repeater technology.
While many shot down XM's $20 million investment in WRSP, what they don't understand is that this $20 million was really a buyout that XM was making -- buying out WRSP's rights to a large chunk of bandwidth, as well as their rights to royalties. It may not have made sense at the time -- but now, it should make a lot of sense in the grand scheme of things. XM really needs that bandwith and lowered royalties.
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