What is going on with Sirius?!?!

[player24]

The Street is looking for industry (Sirius and XM combined) subscriber growth from 4 million at year end 2004 to 51 million by 2014. To put this into context, by 2010 satellite radio will achieve 31% penetration of US households, 15% of total US vehicles and 12% of total US population. Current penetration is 4%/2%/1%.

Assuming these assumptions are correct, the key for Sirius will be raise market share from 24% currently to 50%. If the company achieves this objective, and they don't go overboard with programming costs (Stern, MLB, etc...)the stock may do okay. The unfortunate/typical aspect of the stock story is that everyone knows satellite radio is going to be huge and the market has already priced this assumption into the stock. Although debt is high (see S&P credit report posted above), liquidity is ample and near term bankruptcy risk is fairly low (no big debt maturities in the next couple of years).

Stock may be dead money because of high valuation, but it probably won't bust in the near term unless the duopoloy is disrupted (i.e. unexpected competition). And, with heavy retail involvement in the stock (apart from the many day-traders) and plenty of hype-headlines to come, stock could do well over the near term - particularly if the new satellite radio customers are happy with the service and they run out and buy the stock (a typical phenomena that affects hot consumer product/service providers.)