Satellite radio specialist XM may have to change its tune about a possible
merger with rival Sirius if investors choke on a predicted sales drop.
Bank of America analyst Jonathan A. Jacoby sees sales weakening for both companies over the next few months, as consumers concentrate on other electronic goodies. He predicts fourth-quarter sales will be down 30 percent for XM, compared with a year ago. Sirius, which now leads the market thanks to
Howard Stern, will be off 10 percent.
“Recent channel checks with our buying sources continue to indicate a much weaker sales environment than last year for satellite radio,” Jacoby wrote.
Sirius CEO Mel Karmazin has been fairly vocal about his desire to explore a
Sirius-XM merger. But XM executives, who seem to believe they still own the market, continue to ridicule the notion.
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