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XM Says Finances OK After Stock Plunge

XM Says Finances OK After Stock Plunge

XM Satellite Radio had this to say about several recent stories that quoted one auditor’s negative opinion from XM’s 10K for 2001. XM said the annual report included a standard phrase for companies that do not have 12 months of funding, noting the company’s ability to “continue as a going concern” depends on continued fundraising. That statement from auditor KPMG LLP caused XM’s stock to drop 13% on Nasdaq, to close at $13 Wednesday.
XM stated: “The story and particularly its headline prompted other stories, leaving the impression that there was a new and troubling financial development at XM, causing a drop in the stock. In fact, the auditor’s opinion contained in this year’s 10K is identical to those that have appeared in every XM 10K since it went public in 1999.”
XM points to its launch in 2001, and states it raised $382 million in financing, and
acquired approximately 28,000 subscribers ending Dec. 31. Company officials are confidant XM will hit its first quarter ending subscriber target of 70,000 customers.