By: Gino Lattarulo
The big question on people’s minds lately is whether or not the departure of Howard Stern will cause major problems for Sirius XM Radio (NASDAQ:SIRI) . Will he leave? Will he stay? What will they do without him? The sky is falling ! The sky is falling! Mommy help! Enough already. The time for Stern to have such a significant impact on Sirius has long passed. He is the not backbone. Don’t get me wrong, Howard has done wonderful things for the company. He is an absolute benefit to have and if he stays it would certainly be good for business. But please…. The notion that Sirius would be in really serious trouble without Howard Stern is utterly ludicrous. Does anyone really think the company would be so distraught without him that there would be severe repercussions? Obviously so. I think one dim-bulb author actually wrote that the company would go bankrupt without him.
Let me say this. Sirius will be just fine if Stern leaves. And Heaven knows that the cost savings can be re-directed elsewhere into additional talent content. Sure, Howard is credited with adding two million subscribers when he first came on board four years ago but the notion that two million people will cancel if he leaves is very difficult to believe when you consider the amount of content available. We also have to take into consideration the stock action. We all know that a mere RUMOR of negativity will send a stock down let alone a potentially real occurrence. Sirius’ stock action has made no indication that the significant masses will lose any sleep if Stern leaves. Half a million subscribers per quarter in todays economic climate tells me that there is much more going on than just one person or one entity. Stern was defintely the hype that Mel needed at the beginning, of the company but not anymore. It’s a much broader content arena now.
So if you are going to worry about the long term success of this company, divert your brain power toward the real backbone of Sirius, which is the continued growth of auto sales and the success of the big companies that make it happen. Ford (NYSE:F), General Motors (TBA), Toyota (NYSE:TM), Honda (NYSE:HMC), Nissan, Hyundai, Volkswagon, Chrysler, BMW, Kia, Mercedes, etc.
Remember at the end of the day that hype is just hype and opinions are like…. well, you get the idea.
Position: Long Siri.
