Insightful analysis and commentary for the US and global equity investor
Contributors: Douglas McIntyre Jon C. Ogg

Previous Posts

Friday, July 14, 2006

Most Widely Traded 48 Hour Clock: Sirius vs XM

Stock Tickers: SIRI, XMSR

24/7 Wall St. has begun coverage of the 36 most widely traded stocks, eighteen each from the NYSE and the NASDAQ. Most of these stocks trade over 50 million shares a week. This new feature will highlight each of the 36 stocks at least every 48 hours giving investors fresh infomation and perspective on the companies whose shares are most likely to move the broader markets.

After looking at Sirius (SIRI) and XM (XMSR) in the satellite wars, something came to mind. These stocks are still getting uglier by the day. SIRI is down back at this $4.00 mark, and it is unknown if the stock is trying to form a base or if it is trying to just shakeout shareholders without fortitude. XMSR looks like it is at its lowest levels since 2003.

SIRI has its problems, and that stock was crushed after it came to light how much Howard Stern had been granted in stock options. XMSR has been plagued with supply and distribution problems.

We have already seen the suscriber numbers from the end of Q2 for both SIRI and XMSR, so much of the earnings equation should be somewhat quantifiable. SIRI beat their subscriber targets and XMSR missed theirs, but both shares are lower. SIRI is trading down 15.7% since its June 30 close of $4.75 and XMSR is trading down 13.3% from its June 30 close of $14.65 and SIRI is down 53% from its December 30, 2005 close of $6.70 and XMSR down 53% since its December 30, 2005 close of $27.28. SIRI reports earnings on August 1 and and XMSR reports earnings on July 27.

You would think both SIRI and XMSR have priced in everything except for an operating implosion, but the shares keep falling day after day. Shareholders are becoming more and more nervous and you would start to have to assume that the street is trying to brace for poor guidance out of both. We need a sociologist to throw these two into the cave together to see what happens. Will these two just try to kill each other or will they bond together. Whatever the end result happens to be, these guys need to try much harder to do something for their shareholders.

Jon C. Ogg
July 14, 2006

Powered by Blogger