Vid should have sold on Tuesday.

Sirius Shares Plummet After Downgrade

Wed Dec 8, 4:49 PM ET


NEW YORK - The stock of Sirius Satellite Radio Inc. fell sharply Wednesday after two Wall Street firms lowered their ratings on the satellite radio provider.


Sirius shares closed $6.90, down $2.11, or 23 percent, on the Nasdaq Stock Market.


Analysts at both Smith Barney and Bear Stearns said the company\'s recent flood of positive news had made the stock overly pricey.


Shares of New York-based Sirius hit a 52-week high of $9.43 Tuesday, nearly triple its trading price just two months before. The run-up followed the October signing of a five-year, $500 million contract to carry shock-jock Howard Stern.


Stern, who will leave conventional broadcasting at the end of next year after his 15-month contract with Viacom\'s Infinity Broadcasting expires, paved the way for Sirius to hire former Viacom president Mel Karmazin as chief executive.


On Wednesday, Smith Barney cut its rating to "sell" from "hold" while Bear Stearns downgraded Sirius to "peer perform" from "outperform."


"While we remain bullish on company fundamentals, we believe the recent surge in the stock has taken Sirius to levels which are difficult to justify," Smith Barney analyst Niraj Gupta wrote in a note to investors.


It\'s "too much, too fast," Gupta said.


Both analysts cited Sirius\' 11 percent jump Tuesday as an example of the market\'s overreaction.


Tuesday\'s rally came after both Sirius and its rival, industry-leader XM Satellite Radio Holdings Inc., announced long-awaited agreements to have their radios installed in new Toyotas. Sirius signed a contract to have its radios installed at a post-production facility, while XM got a factory-install agreement. Factory-installations are cheaper and thus more appealing for car dealerships. Still, Sirius stock jumped 11 percent while XM\'s rose 2 percent.


At the $9 share price Sirius was trading at Tuesday, the market is valuing the company the way it valued satellite TV provider EchoStar when it had 3 million customers, Robert Peck at Bear Stearns said in his note. Sirius, however, expects to finish the year with 1 million users. At the end of last year, it had just 261,000 subscribers.


Sirius is striving to catch up to subscriber levels at XM, which started up in late 2001, a few months before Sirius, and has 2.5 million subscribers.


Sirius chief financial officer David Frear had no comment regarding the company\'s stock movement Wednesday but took issue with analysts\' take on the Toyota contract.


For the next year at least, Sirius radios installed in Toyota will have a lower price point, he said. Under XM\'s current dealer-install agreement, an XM radio costs $450 to $490, he said. XM\'s new factory-install agreement, which is expected to lower the price tag, won\'t start until 2006. Meanwhile, a Sirius radio with Toyota will cost $299.


By the time XM\'s factory installation kicks in, "the cost of putting our product into cars — either at a factory or (postproduction facility) will drop significantly," Frear said.


"At the end of the day, customers will choose based on content. Our content with NFL, with Howard Stern, Eminem (news - web sites), and other programming is clearly superior to XM," he said.


XM\'s CFO, Joe Euteneur, said his company hasn\'t seen much change to subscriber sign-ups since Sirius snagged Stern.


"It\'s hard to piece out the impact from a particular issue," he told attendees at an investor meeting in New York on Wednesday. "We\'ve seen quarterly and monthly subscriber progression patterns that are pretty similar to what we\'ve seen in 2003 and 2002."

Euteneuer reiterated that the company is on track to reach 3.1 million subscribers by the end of the year.

Shares of XM closed at $38, down 41 cents, or 1.1 percent, on the Nasdaq.


http://news.yahoo.com/news?tmpl=story&cid=509&u=/ap/20041208/ap_on_bi_ge/sirius_stock_6&printer=1

Would have made a killing... Just imagine if you had the money and bought up a little over 100,000 shares for a little over $300,000 2 months ago you could have walked away with $700,000 after your intial investment.

[CHIZZY]

owwie.......in other news, dimebag darrell is dead.

[Titan]

I should buy this stock now when its low. Then when it goes up again, I will be richer Only 10 more days and I can buy stock on my own

Poor Vid.

looks like biglog doesn\'t eat this month.

[Titan]

Looks like vid needs to cut back on male hookers and beer.

I read this a little while ago.

I havent seen him around today - im guessing hes out in some dark corner crying.

*shrugs*

Makes all the rest of us look a little better now.



jk

Forget Vid, what about me? I bought at $8.93!

It might be a while before that happens again. Sirius at $9, I mean.

ah welcome to the clubobobobob. the aussie dollar was 79 on the 26th of last month and I got greedy by waiting for it to hit 80!! ARGH, now I might end up paying 10 bucks more for that stupid Torque license!@$@#$!@$#

Actually he bought it at around $3 if I remember correctly, so he has more than doubled his money - but it did peak and it won\'t get that high again for some time.

[Titan]

I think I\'ll go and buy some stock on my 18th birthday. Mostly Sirius. I need some money