Kudlow and Cramer are having a segment on XM and SIRI after the commercial...going to watch and will comment after.
A couple of things on the Fool article. I don't think the author was off base in being tough on the strict financials of the company, because they are not the best looking numbers you will find in supporting a company. Coming to the party late definitely hurt them a little, but they are creating a nice niche and are addressing key points that should sustain the company. There are plenty of valid concerns to the balance sheet however.
The K&C segment really had little insight, and the talking head was asked to make a call at current valuations and she picked XM based on subscriber numbers and forecasts.
Another thing that concerns me a tad about SIRI is the plan that allows subscribers to pay for three years in advance and get the rest of your service FOR LIFE at no additional charge. This may grab some quick revenue, but for the people they seem to be positioning themselves for...this deal is a great one (I am going to grab it), and will kill revenues past three years from now for all those that take advantage of it. I'm hopeful that it is a limited time offer...and I am one of the few that will benefit from it. Will check on that. (Just checked...the new plan runs until August 31, 2004 and costs $499.95 for lifetime subscription. I already blew it...could have saved $100.) Am glad to see they limited it, moved it up a little. I think the $399 may have been a holiday promo or intro promo as you sign up. Not sure what XM offers...if nothing like that, it is surely a good way to grab customers at an important time. But since SIRI does not make money from advertising...this could hurt revenues that way in the future, as well. Maybe the $4 extra per month will cover that, I don't know. I know you need fewer subscribers at $13 than you do at $9. A point glossed over when the heads are talking about subs, I think.
Many things the company is doing make sense, and many are essentially a gamble. I think the gambling is a good idea with the limited competition, provided they can calm down and make some SIRIUS money in the next 2-3 years.
I'm sure I am less informed on this company and XM as many, but I am learning. Sorry for the poorly written post...I am bouncing around tonight!
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