Sirius Satellite Radio
(SIRI - Get Report)
and merger mate
XM Satellite Radio
saw shares tumble Monday after both outlined plans to raise more capital.
The news came as Sirius announced preliminary results for its second quarter early Monday, saying it anticipates a 25% jump in both revenue and subscriber numbers from a year ago.
Sirius said it will sell about $375 million in common stock in a fixed-price public offering, with up to another $65 million more to come later concurrently with a private offering by XM. The exact number of shares Sirius will offer depends on the terms of the XM offering. XM said it plans to offer $550 million of senior notes, due in 2014, which will be exchangeable into shares of Sirius common stock.
Shares of Sirius dropped 37 cents, or 16.4%, to $1.88. XM slid $1.11, or 11.9%, to $8.17.
Earlier, Sirius said that revenue for the second quarter 2008 should be approximately $283 million, up from $226 million in the same period in 2007. The Thomson Reuters average estimate currently stands at $283.9 million. Sirius also said that it will have an adjusted loss from operations of $24 million, narrowing from an adjusted loss of $79 million a year ago. The company did not provide data on a per-share basis.
Additionally, Sirius said its subscriber count rose 25% from a year earlier to 8.92 million. Retail subscribers were up 7% in the second quarter, while OEM subscribers, which include automobile installations, surged 53%. Monthly churn, a measure of how many subscribers left the service, decreased to 1.6% from 2.1% in the year-ago period, and the conversion rate is estimated to increase to 48% from 47% last year.