Phrenzie.com

XM released earnings today and, losses for the quarter were greater than expected.  Losses for Q1 were $129 million.  Sirius, on the other hand, also reported losses, but were less than expected and came in at $104 million.  What’s more important is cash from operations.  XM didn’t report this number in the press release, but Sirius did, which was a cash loss of $139 million.  I would presume that XM has a cash loss as well.

Damn!

When I first began to watch these companies in 2004, both expected to be cash break even in two years…so 2006.  It’s 2008 and it doesn’t sound reasonable to expect a cash profit by the end of the year.

I’m saying, why not allow them to merge.  There’s but so much debt and equity that the companies can issue. 

I don’t know that if together they will be better off in the short-term, because it’ll depend the level of short and long-term financial commitments (like the use of satellites), but presumably there are some operations that will provide considerable cost savings. 

I’d say, let them merge or expect them to die off over the next few years and then you won’t have any competitors in this space.  I can’t imagine someone buying them…except to cell off some of the assets.

There doesn’t appear to be much of an argument for keeping them separate on anti-trust grounds.