Satellite Static

XM and Sirius are being pressured to merge because of financial troubles and are discovering what others in the sector already know: It's a tough business

Investors are agitating for a merger of XM Satellite Radio (XMSR) and Sirius Satellite (SIRI), the two providers of radio via satellites that orbit the earth. Speculation about a deal began last summer and gained momentum in early December, when Sirius cut its subscriber forecast for 2006 from 6.3 million to between 5.9 million and 6.1 million (see, 12/5/06, "Sirius Sings the Holiday Blues"). Over the course of 2006, shares of XM and Sirius plunged 62% and 54% respectively, as investors fretted that the potential market wasn't big enough for two players.

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