Sirius and XM Merger – Agreeing with Jim Cramer

I bought Sirius Satellite Radio (SIRI) as part of my year end bounce strategy.  I continue to own it as part of my play on this new type of radio. The merger announcement with XM (XMSR)

(still subject to regulatory approval) will benefit shareholders in the long run.  Limiting competition by creating one big company may be bad for me as a Sirius subscriber and consumer.  However, it will probably be better for the stock price.

Saturation point for Satellite Radio?

Though satellite radio is not near reaching saturation, I do think it will at some point.  Satellite radio is the classic case of expensive customer acquisition masking an underlying profitability. Success stories in the customer acquisition story include (AMZN), and most cable and some cellular operators.  Famous failures are the hundreds of Internet startup companies run and founded by MBA's looking for a quick buck rather than a real change to a business model.  (I have a lot ot say about the lack of innovation problem that most MBA's who focus mostly on personal financial gain creates – but why bore the reader now).  

It pains the contrarian in me to agree with someone as popular as Cramer, but he also likes Sirius.   

Disclosures and Confessions:  I own SIRI.  I have traded SIRI both long and short in the past two years.  I have Sirius Satellite Radio in my car.  I have made guest appearances on the Lime Network (on Sirius).   I do not own XMSR but I have traded it in the last two years.  I own Inc Convertible Bonds 6.875% Euro Denominated Maturity 2/16/2010 which I acquired in March of 2001 during a panic about the company.Where did I buy them? Should I gloat at taking advantage of panicking frightened little fund managers?  (let's say it rare that you can hit a triple on a bond)

Disclaimer:  Nothing in this trade log is meant to be specific financial advice or a recommendation to buy or sell.  I do not give investment advice.  Do your own research.  Do not rely on anything in this weblog to make investment decisions.  I do not log all my trades here. I only describe or mention those that I think might be interesting. Consult an investment professional familiar with your specific financial situation before buying or selling any security.