This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The 5 Dumbest Things on Wall Street: March 25

5. Stern Suits Up Against Sirius XM

Howard Stern in a spat with his employers!? Who would'a thunk it?

Actually, when it comes to Stern and his relationship with the suits, it's always a matter of when, not if, he'll turn on them -- something current employer Sirius XM (SIRI - Get Report) may have forgotten.

If so, they got a reminder this week when Stern filed suit against his company for allegedly failing to pay stock awards it owed the shock jock in exchange for helping the satellite radio company surpass its subscriber growth target. At the end of December 2010, the company had 20.2 million total subscribers, the highest number of net subscribers in its history. Stern, naturally, believes he played a not-so-small part in making that happen.

One Twelve, Stern's production company, and his agent, Don Buchwald, claim Sirius didn't adhere to its five-year compensation agreement. According to the suit, Sirius gave Stern his initial bonus stock award of 34.4 million shares, then valued at $225.8 million, after he signed on in January 2006, but has failed to do so over the past four years. The self-professed "King of All Media" is claiming that he should have received a new stock award each year.

"Pursuant to our October 2004 agreement with Stern, we agreed to deliver these shares in December 2010, or earlier if as of the end of any fiscal year we exceeded agreed upon subscriber targets," Sirius said in a document filed with the Securities and Exchange Commission on Jan. 5, 2006.

How Stern and Sirius management were able to work out a new contract in December is particularly surprising, considering that Stern made it known this would be an issue. Last year, when Stern complained about not receiving his bonus, Sirius XM's general counsel Richard Basch told him and Buchwald that he did not give him the stock awards because the company did not count XM's subscribers toward the total number of Sirius subscribers. Gotta love that legal logic.

Poor Sirius investors thought their Stern nightmare was over after a new contract was ironed out before the end of the year with very little drama. Little did they know Sirius management seems to have decided to play a game of chicken with its most influential and vitriolic talent. Brilliant. When news of the suit surfaced on Wednesday, an analyst downgraded Sirius to a hold.
1 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BAC $17.48 0.23%
AAPL $117.99 -0.03%
COF $79.01 -0.04%
C $54.21 0.24%
MMI $33.64 -2.50%


Chart of I:DJI
DOW 17,815.43 +2.04 0.01%
S&P 500 2,091.39 +2.52 0.12%
NASDAQ 5,128.7440 +12.6010 0.25%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs