Cost Question Orbits Sirius Satellite

Horace says the company should launch its spare to better serve products in the future. New mobile devices like handheld radios and cell phones will require better coverage, says Horace.

"Mobility down to a cell phone probably wasn't contemplated when they originally put their satellite plan together," says Horace, who has a buy rating on the stock.

But increased demand for stronger signals will boost the need for cash. Bear's Peck says refurbishing the fourth satellite and building a fifth as a spare will likely cost between $200 million and $275 million in capital spending over the next year.

Analysts say Sirius tested the high-yield debt market in March and failed to find favorable terms to raise more cash. The concern among some shareholders is that the company could try to sell more stock to raise money, a move that would dilute the holdings of current investors.

Sirius didn't return a call seeking comment. Shares fell a penny to $5.48 amid a broad market rally in midafternoon trading Wednesday.