Bucks Up for XM Radio

XM Satellite Radio Holdings is now in a position to operate well into the fourth quarter of 2002, thanks to a $129 million stock offering underwritten by Morgan Stanley Company. XM made the announcement in a press release dated December 10.

The total allotment of XM stock was 11.5 million shares, according to the announcement. That, combined with a recent $66 million financing agreement with Boeing Company, should be sufficient to keep XM afloat for the next year, company officials believe.

The financing was necessary to insure XM's operations while it builds a subscriber base, expected to see exponential growth in the coming year. Credit Suisse First Boston analyst Ty Carmichael, Jr. told Dow Jones Newswires in late November that XM's net subscriber additions should total about 240,000 in 2002, an eventuality that could push the company's stock price up.

"A growing subscriber base should catalyze stock price appreciation in 2002," Carmichael stated. Subscriber sign-ups for 2001 are estimated at about 10,500.

XM officially went live with its 100-channel digital satellite radio service on September 26, and began a nationwide expansion on November 12.

Share | |

X
Enter your Stereophile.com username.
Enter the password that accompanies your username.
Loading