Q & A: Strippers & Midgets Get Sirius
- Mar 28, 2006
- admin
- Investing
Q: What do you think of Sirius Satellite Radio?
A: I’ve always believed that satellite radio was going to be here to stay. In fact, Howard Sterns joining is just another in a long list of content providers validating the basic model of the fledgling industry. Competitor XM Radio paid $650 million to Major League Baseball to broadcast their games.
So it seems content providers are beginning to take satellite radio seriously. In addition, it seems that both companies are doing a fine job of signing up strategic partners to distribute their products. So far, Siruis counts Ford, Audi, BMW & Daimler Chrysler among their distribution partners. XM Radio distributes through Honda, Acura, Cadillac and General Motors.
Ultimately, I think both companies have attractive products and each management team seem to be executing fairly well. There seems to be a high chance of ultimate success.
But there is a huge difference between liking the company and thinking the stock is cheap enough to purchase.
In this case, I’m afraid that the negative free-cash-flow doesn’t allow me to even get a reasonable estimation of the value of the company. And if I can’t do that I don’t invest.
That’s simply not the way I play the game.
Hope this helps….
–By Dylan Jovine