Investing in Sirius Satellite Radio

With my profit sharing I have earned, I would choose to invest in Sirius Satellite Radio also know as SIRI. Although, over the past couple of years, SIRI stock has been low with no real increase. I feel this market is ready to explode. This is why, since they started in 2002 they have more than doubled their amount of subscribers each year. (See Spread sheet Subscribers) (Sirius, 2004). Furthermore, with the announcement of Howard Stern moving to getting world wide coverage, when they move takes place, I feel this is going to be a big boost in subscribers for the radio. (McShane, Dec. 11, 2005)

Not to date myself, however, I feel this new Satellite Radio is similar to the explosion of cable television. Cable television, was commercial free, and skirted its way around rules and regulations of publicly broadcasted television. Subject matter and MTV and similar station didn't have commercials like they do today. Today cable television is about quality of picture and those channels that didn't have commercials now do.

I feel this market is ready to explode similar to that of cable television in the 1970's. With Freedom of speech, and many programs other than Stern for all to enjoy commercial free. Other programs include Christian Station, Rock Station, Pop culture and a lot more. (Sirius, 2005) They also have more than doubled their advertising efforts over the last year to include commercials during the NFL games. (Sirius Satellite Radio, 2004) Their efforts to improve brand awareness during 2004 should pay off in 2005, 2006, 2007 and beyond.

Their proxy statement includes metrics, subscriber increases, and balance sheet. Looking over their financial data, their stock and company is currently operating at a loss. At this time they have no plans for now or in the future to offer dividends (Sirius Satellite Radio, 2004) The company is losing money. On paper this looks like a terrible investment, but so did IBM and Apple when it first came out. The company continues to increase it's cash flow though "financing activities and investing." (Sirius, 2004)

We also must look at the growth of the stock over the last two years. In 2003, they stock high was $3.16 and low $.41 and then in 2004 low of $2.05 and high of $9.01. (Sirius, 2004) As you can see from 2003 to 2004 the stock increased slightly. This company stock has no where to go but up. I feel with the addition of Howard Stern and his 5 million viewers, the increased in brand awareness, and the dedication of its board of directors, this company is a high risk investment I think will pay off with patience.