DirecTV Sells XM Stake

Shares of XM Satellite Radio (XMSR) slipped Friday after longtime backer DirecTV (DTV) sold its stake.

DirecTV raised $230 million Friday by selling the public 9 million shares in the fast-growing Washington, D.C., satellite radio broadcaster, XM said in a Friday morning press release. DirecTV, which until this year was a General Motors (GM) unit called Hughes Electronics, was an early investor in XM and remained its largest shareholder through January, according to Yahoo! Finance.

The investment was surely a profitable one for DirecTV, which recently came under the control of Rupert Murdoch's News Corp. (NWS). After all, XM shares posted a staggering 1,000% gain last year as investors bought into its promise of early leadership in a fast-growing tech niche. At the end of 2002, before the XM rally began in earnest, GM and its affiliates held nearly 20% of the company.

XM and rival Sirius (SIRI), another 2003 highflier, offer roughly 100 channels of mostly commercial-free programming for $10 a month and up. XM in particular has impressed Wall Street with its rapidly expanding subscriber base, but critics continue to caution about both companies' cash-burning ways.

On Friday, XM slipped 17 cents to $26.94.

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