Yesterday, SIRIUS XM Radio Inc. (SIRI) declared that the company gained a massive 445,921 net subscriber addition in the just concluded third quarter of 2012. This depicts nearly 34% year-over-year upside and demonstrated the best ever third quarter net subscribers’ addition in the company’s history. Total subscribers base at the end of the third-quarter 2012 was 23,365,383, up 9.5% year over year.
The strong performance was mainly spurred by impressive management execution on the back of rising auto industry sales. As per management, the net subscribers’ growth momentum of the company will further expand in the rest of 2012 and has raised its estimation to approximately 1.8 million of net subscribers’ addition in 2012. This is the third time management has raised its net subscribers’ figure in 2012.
SIRIUS XM has a very strong business relationship with OEMs (original equipment manufacturers). The company currently commands an estimated 70% market share of new cars sold in the U.S. In January 2012, SIRIUS XM raised the prices of its services. Subscription prices were raised almost 12% to $14.49 per month. Despite this, the company holds its market share in the face of growing competition from Pandora Media Inc. (P) and Spotify.
Meanwhile, SIRIUS XM is currently fighting a hostile takeover bid from Liberty Media Corp. (LMCA), its most powerful creditor. Liberty Media has filed a new application to the U.S. Federal Communications Commission, in which the company stated its intention to acquire more than 50% of SIRIUS XM, so that it can take full control of the Board of SIRIUS XM. Liberty Media withdrew its previous application with Federal Communications Commission (FCC) to de facto control SIRIUS XM. Instead, the company is now willing to get a full control. Liberty Media at present has 49.6% stake in SIRIUS XM’s total outstanding shares.
LIBERTY MDA-LC (LMCA): Free Stock Analysis Report
PANDORA MEDIA (P): Free Stock Analysis Report
SIRIUS XM RADIO (SIRI): Free Stock Analysis Report
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