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TheStreet Open House

Sirius XM Is Not Alone Anymore

Stocks in this article: SIRILMCAPAOLYHOOAAPLNOKRIMM

NEW YORK ( TheStreet) -- There was a point when I thought no company on the stock market was more misunderstood than Sirius XM (SIRI).

While at the time it was meant as a slight against the wannabe know-it-alls who roam Wall Street, I'm beginning to realize that it was actually the company's own investors who have misread the stock all along.

Warren Buffett once said that when a business does well, the stock will eventually follow. There have been very few things that Buffett has been wrong about, much less the basic fundamental principle of cause and effect.

So for all of the great things Sirius has been able to do within its business -- while enjoying the benefit of what investors like to say as having "no competition" -- it is unable to explain why the stock continues to plummet, even with the so-called " catalyst" of Liberty Media (LMCA) scooping up cheap shares on the open market.

"Competition" and "monopoly" are two concepts that Sirius investors have never been able to fully grasp, even though Internet radio giant Pandora (P) continues to grow each quarter and appears to be able to monetize its listening audience by virtue of growing ad revenue. Then there is Spotify, iHeartRadio, terrestrial radio, and online radio stations from titans such as AOL (AOL) and Yahoo (YHOO), all of which can easily be streamed to your smartphone by downloading a free app.

Yet, investors remain convinced Sirius XM has no competition and is a monopoly. But I wonder what will be made of the news that came out on Tuesday from Samsung?

Samsung is in a neck-to-neck race with tech giant Apple (AAPL) in the fight for smartphone supremacy. Many do not realize that Samsung is in fact winning by having surpassed both Apple and Nokia (NOK) in global device sales in the first quarter. As a way to attack Apple's popular iTunes service and to a lesser extent Research in Motion's (RIMM) BlackBerry music service, Samsung plans to launch its own mobile music service for its latest Galaxy smartphone model called Music Hub.

While analysts were quick to focus on its impact on iTunes and possibly Pandora, I think the real victim from any success of this service will be Sirius XM.

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