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Wednesday, November 08, 2006

Cramer Is Serious on Sirius Satellite Radio (SIRI)

On CNBC's MAD MONEY, Jim Cramer hosted Sirius Satellite Radio's (SIRI) Mel Karmazin. As a reminder, Cramer was positive once already this afternoon on the STOP TRADING segment on CNBC around 2:45 PM EST. Mel said he doesn't need to merge, but they would do what is best for holders. Cramer earlier said the stock could go to $5.00 or higher on its own and could go to $8.00 in a merger. Cramer earlier touted the SIRI quarter as good and thinks they'll make money in two-years. Cramer says that growth at a reasonable price is SIRIUS (SIRI).

Cramer had Mel Karmazin on the show. Cramer noted that Howard Stern has worked, as they have added over 4 million subscribers since before Stern joined SIRI. Cramer asked if NASCAR could be as big as big as Stern next year. Karmazin said he thinks many will buy the service solely for NASCAR next year. On the soft retail market Karmazin said it has quieted down, but he thinks the holiday season will be gangbusters like last year. Karmazin did say they have a lot to do to hit the year-end numbers, but they can hit cash flow positive next year on $1 Billion in revenues if they hit their targets. Compared to terrestrial revenues, SIRI is behind only Clear Channel and CBS in listeners and will be the third largest or fourth largest radio entity next year after only having 4 years of operations. He said they will do $3 Billion in revenues by 2010. He wants ad revenue about 10% of total revenues, or $100 million next year. Karmazin said there could be a value created in a merger, but they would rather go it alone as they are still adding more partners. He would be open to making an acquisition if it helped shareholders.

Cramer said he thinks that the stock can make a 50% move from here. SIRI closed up 0.75% at $4.12 on the day in regular trading, but the stock rose 2.9% to $4.24 in after-hours trading after Cramer said it can go up 50% from here.

Jon C. Ogg
November 8, 2006
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