Both XM and SIRI are hurting financially. In SIRI's case, it went on a spending spree to increase subscriptions. From most of the numbers I see, http://www.orbitcast.com/, both companies have had subscriptions level off in the past few months. The future is either a merger or someway to start up subscription growth again. The only one getting rich at SIRI is Howard Stern.
could be the 1/2 billion 5 year contract to stern and weak demand for subscription based radio. nobody wants to pay for a new unit + monthly subscription, except for sports maybe... then again sports fans pay $10 for a hotdog and a beer so it can happen.
Because they think the price bottom has been reached and are in a speculative play. Why did people still invest in Enron up to the very end? Answer, they were fools and believed the marketing hype, broker's advice, newsletters and the books. There is also the old adage "There is a sucker born every minute". This is an attempt to explain why there will always be "haves and have nots" and why the market exists as a diving tool to sort who is which. TS
Here is how it worked in the case of Enron and the leadership: They get their big money if the stock performs well, not necesserily the company making profit. By spending and showing revenue (subscriber growth), they are trying to make investors believe that this is a good and profitable company for the future, thus you would buy the stock. Now of course the cash flow shows the real picture. I think 2 companies are just too many for this market. It could be made sligthly profitable if they merge and stop paying outrageous salaries for their emplyees....