Sirius Satellite Radio: Bleeding Cash Faster Than Subscriber Growth

I just read a line from a Motley Fool RSS feed:

Everywhere you look, you will find companies that have seen their shares plummet despite good news... Sirius Satellite Radio's (Nasdaq: SIRI) shares have been cut in half since peaking two years ago despite blowing past subscriber growth targets.

Um, yeah, but they continue to lose more and more money as they grow subscibers. Adding subscribers doesn't mean value's been added and the stock should go up.

Lest we not forget Krispy Kreme Donuts (KKD) which suddenly sprouted stores everywhere?

Take a look at earnings per share for SIRI (click to enlarge):

source: Factset Research Systems

What's worse, SIRI is not even profitable at the Gross Margin level. Ugh.

I'll give 'TMFBreakerRick' the benefit of the doubt - because I'm sure I've written some silly things before too.

Comments

[Burak Tekes]

It's really hard to understand what kind of business plan they have (both sirius and xm). I took a look a the financials for the last 4Qs. Both companies are far away from profitability; no earnings, negative equity, negative CFO. I think the industry is heading to a major restructuring. One of the players will eventually go out of business.