NEW YORK ( TheStreet) - Despite Wall Street bigwigs selling Sirius XM (SIRI - Get Report) stock during the fourth quarter, the company did implement its first price hike in its ten-year history, which should help future profitability.
Sirius, which merged with XM Satellite Radio in 2008, raised its monthly subscription price to $14.49 per month, up from $12.95 per month. CEO Mel Karmazin said back in November that he was not worried about losing subscribers due to the price hike.
When the two companies merged, they agreed not to raise prices for three years.
The price hike should help the company continue growing its free cash flow, and potentially allow it to buy back stock, or perhaps even pay a dividend.Sirius has spent tremendous amounts of money to acquire on-air talent, such as Howard Stern, Martha Stewart and Oprah Winfrey. The satellite radio company also has the rights to broadcast NFL games. Will the new price hike, that went into effect last month, cause you to cancel your subscription? Vote in our poll and tell us what you think (the results will be up tomorrow afternoon):