Analysts Debate ‘The Stern Effect’ on XM

Media analysts say trouble with business partners and the possible effect of Howard Stern going to Sirius have depressed the stock price of XM Satellite Radio and caused some analysts to say the satcaster needs to say how it will weather these storms, reports the Washington Post. Though at 5 million, XM has more than twice the subscribers of Sirius, Sirius has reported faster subscriber sign-ups in the last quarter and predicts even more acceleration after Stern arrives in January.
One of XM’s main receiver maker partners, Delphi, recently declared bankruptcy, raising concerns about possible supply disruptions, and in the downturn of the automarket, the number of cars in which GM said it would install the XM product has fallen below some analyst expectations, according to the account.
“Management’s still got explaining to do,” noted CIBC World Markets Analyst Jason Helfstein, yet he said none of these issues are a problem in the long-term, according to the report.
Another analyst quoted by the Post, April Horace of Hoefer & Arnett, said while Sirius will get a boost in subscribers from Stern appearing in January, long-term XM has the advantage because more U.S. automakers, some 60% to 70%, offer its radios.