Herb Greenberg over a MarketWatch has an interesting theory. The XM (XMSR) merger with Sirius (SIRI) may be a move of desperation given the large number of competitors in the market. He quotes this comment from the press release about the merger: "In addition to existing competition from free ‘over-the-air’ AM and FM radio as well as iPods and mobile phone streaming, satellite radio will face new challenges from the rapid growth of HD Radio, Internet radio and next generation wireless technologies."
And, perhaps the market itself is signaling a critical truth about the deal. Sirius stock is up only 7% on the news and still trades below $4 at 10.40 AM New York time. In December of 2004, the stock was above $8.
Maybe the deal will only buy time for a business model that has become flawed as competition enters the market.
The price of the stock seems to be saying so.
Douglas A. McIntyre can be reached at douglasamcintyre@247wallst.com. He does not own securities in companies that he writes about.
Related Articles:Irregular Volume of TCF Financial Corporation - NYSE -TCB
Introducing the 24/7 Wall St. Wire
Tags: 2012 Canadian Stocks ,Growth Stocks 2012 ,Growth Stocks To Watch 2012 ,NYSE:TCB ,TCB ,TCF Financial ,Best China Stocks 2012
No comments:
Post a Comment