Stern rumors put a chill on Sirius shares

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Is Howard Stern about to ape Opie & Anthony and do an uncensored version of his radio show for a satellite audience and a less-raunchy version for a broadcast audience? Not if Stern is to be believed.

 Despite his proclamations that he wouldn't return to traditional radio, rumors have persisted that Stern was negotiating to do just that, and a Tuesday report from the New York Post gave credibility to the speculation.

 Wall Street interpreted it as potentially bad news because any such deal would dilute his Sirius Satellite Radio exclusiveness. Sirius shares fell 6.1% on Tuesday to $3.86.

 "Sirius stock could be under modest pressure whether or not there is validity to the chatter," said Miller Tabak + Co. analyst David Joyce, who reiterated his $6.50 price target on Sirius shares.

 Joyce also upped his target on XM Satellite Radio shares from $15 to $18. Shares of XM closed down 4.1% on Tuesday to $13.31.

 If Stern were to go back to traditional radio, it would be via a route similar to that taken by Opie & Anthony this year that put them on XM and also certain CBS Radio stations.

 Stern has declared traditional radio -- as well as XM -- his enemy and has told his satellite radio audience that he's not interested in returning to broadcast radio, where he again would have to adhere to FCC restrictions on content.

 By some estimates, Stern enjoyed an audience of as many as 16 million people a week when he was on regular radio. When Stern said nearly two years ago that he was headed for Sirius, the company had 600,000 subscribers. At last count, Sirius has grown to 4.7 million, though the sat radio firm won't say how many regularly listen to Stern.

 Analyst Joyce also noted that rumors were circulating that Sirius might be interested in purchasing Citadel Broadcasting Corp., which is buying many of the radio assets of the Walt Disney Co. He said a Sirius-Citadel combination "may not be attractive."
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