Sirius cheers by Karmazin


Sure, Sirius Satellite Radio stock has been plummeting, but at least "we suck less" than XM Satellite Radio, Sirius CEO Mel Karmazin said Thursday.

But even that proclamation is debatable. Sirius stock is off 40% from its 52-week high, while XM shares are down 33%.

Karmazin was speaking at the Sirius shareholder meeting in New York, where he also said it was a "disgrace" the way Don Imus was forced from his job at CBS Radio, an entity once run by Karmazin.

He also defended the $500 million pay package for shock jock Howard Stern, telling shareholders, "He earned it." Sirius has gone from a little more than 600,000 subscribers on Oct. 6, 2004 -- the day Stern said he planned to join Sirius in 15 months -- to more than 6.5 million subscribers, and Karmazin likes to credit Stern for a lot of those sign-ups.

Two days after Stern's bombshell announcement almost three years ago, Sirius shares were at $4; they closed Thursday at $2.90.

Karmazin acknowledged the drop but expressed his confidence in a rebound and noted that he personally has not sold any of the $20 million in Sirius shares he purchased.

Karmazin's presentation came the same week the National Association of Broadcasters disclosed the hiring of lobby group Bluewater Strategies, presumably to help argue against a proposed merger of Sirius and XM.

Also this week, Goldman Sachs reiterated its "sell" recommendation on Sirius stock because the company could be running short of cash.

"We can envision several scenarios in which Sirius is actually fully funded but think it is more likely the company returns to the capital markets as early as" this year, analyst Mark Wienkes said.

The analyst thinks a $300 million convertible bond offering due in 2009 might need refinancing, and the company could require about $600 million from 2010-12 to deploy two new satellites.

Sirius started the year with $393 million in cash "and is pacing to burn $230 million in 2007," the analyst said.

"Sirius is more likely than not to return to the capital markets to refill its cash cushion," which could knock the price of shares down to about $2.25, or 22% lower than where they traded Thursday, the analyst said.

The Associated Press contributed to this report.