Sirius Narrows User Gap

Perhaps the most severe blow came when a cost-critic director bolted in February. The cash fire apparently grew too hot for XM board member Jack Roberts, who quit on earnings day, warning that there was "a significant chance of a crisis on the horizon."

Now, XM's market value trails its smaller competitor by $2.7 billion. "The relative valuation gap strongly favors XM from here, even though it will inevitably suffer from the 'optical illusion' of Sirius's competitive advantage," writes Bernstein's Moffett.