XM subs drive Sat radio shares up
More than 6% increases for companies hoping to mergeShares of the satellite radio companies hoping to merge spiked Monday after XM released preliminary numbers indicating the company was just shy of hitting 10 million subscribers.
XM also said it expected as much as $288 million in second-quarter revenue and a loss of as much as $38 million, both of which seemed to impress investors.
Shares of XM rose 6.2% and Sirius rose 6.1% Monday. XM closed at $9.07 and Sirius $2.42.
XM said it was signaling early financial metrics due to its pending merger with Sirius, which the FCC could approve or shoot down any day now, and because it also announced Monday it was offering $400 million in senior notes. That move is its latest in a series of debt-refinancing transactions related to the hoped for merger.
XM said it added 322,000 net new subscribers to 9.65 million, which is 17% more than it had a year ago. Churn also improved to 1.67% from 1.84% last year.
At the end of the first quarter Sirius reported that it had 8.64 million subscribers.
Significantly, XM said its gross additions from new-car installations was 857,000, marking the fifth record quarter in a row for sales via original equipment manufacturers.