Sirius Head Offers Odd Reassurance To Investors
Friday, May 25, 2007
Mel Karmazin, Sirius Satellite Radio's chief executive, sounded like a shock jock yesterday as he sought to allay shareholder concerns at the company's annual meeting. Noting that he was disappointed by Sirius's lagging stock price, he said that when compared with rival XM, "We suck less."
Karmazin, addressing shareholders in New York, acknowledged that he was "real unhappy" with the company's stock price, but he stressed that he has not sold a single share of Sirius stock and has roughly $20 million of his own money invested.
Sirius's stock price has fallen consistently since early 2006, when it opened the year at $6.70. It has been below $3 since early May. Its shares rose 4 cents yesterday, to $2.90. XM shares rose 28 cents, to $11.90.
Karmazin acknowledged that Sirius and XM face an "uphill battle" to get a merger approved. Traditional radio broadcasters are lobbying against the deal.
Karmazin blamed the stocks' poor performance on Wall Street's negative view of the satellite radio business despite the progress both companies have made building subscriber bases and getting closer to profitability. Sirius and XM continue to lose money as they invest in acquiring subscribers and programming.
On Wednesday, Sen. Herb Kohl (D-Wis.), chairman of the Senate Judiciary antitrust subcommittee, urged regulators to block the merger. He said it would violate antitrust law and hurt consumers.