Cramer: Worried About the XM/Sirius Merger

The longer they have to wait for the FCC to rule, the worse things get for these stocks.
Author:
Publish date:

Worried.

Worried about the

Sirius

(SIRI) - Get Report

-

XM Satellite

(XMSR)

deal.

This is a deal that should have happened when the Justice Department gave the nod to it. That non-political judgment should have been enough to make it work. But it's been stalled on the FCC's desk since then, and the comments I have heard are incredibly contradictory about when it might be approved, and if it will be approved at all.

FCC chairman Kevin Martin first indicated to people that he didn't even know if the deal would come up anytime soon. Then yesterday he said it might come up this month, and they are working hard on it.

Cramer: Sirius, XM Need a Fast Wedding

var config = new Array(); config<BRACKET>"videoId"</BRACKET> = 1600170977; config<BRACKET>"playerTag"</BRACKET> = "TSCM Embedded Video Player"; config<BRACKET>"autoStart"</BRACKET> = false; config<BRACKET>"preloadBackColor"</BRACKET> = "#FFFFFF"; config<BRACKET>"useOverlayMenu"</BRACKET> = "false"; config<BRACKET>"width"</BRACKET> = 265; config<BRACKET>"height"</BRACKET> = 255; config<BRACKET>"playerId"</BRACKET> = 1243645856; createExperience(config, 8);

What's to work on?

The combined company has agreed to everything anyone has suggested that might be monopolistic. It is true that the FCC will have to go back on its charter on the deal that says there have to be two competitors here.

But the FCC has never, I believe, taken into account what could happen if nothing happens: one or both could go bankrupt.

Isn't that what is behind the decline in the stocks? Isn't that what we are really worried about? They obviously act like rejection is a foregone conclusion.

So instead of choice, which the FCC is so worried about, you could get no choice at all, as I simply don't believe XM can make it at this point if there is no deal. I think they run out of money. Given that scenario I believe that Sirius could go up, but it won't go up until XM goes under.

In short, all the scenarios are bad the longer the FCC drags it out, and the scenarios are terrible if the FCC says no.

The good news: if you are playing any stock game with Sirius you may have a data point that can move the stock coming up after Martin's comments yesterday.

The bad news is that I think it might turn out to be a bad data point given the wait we have seen and the power of the congresspeople responding to terrestrial radio company entreaties.

Jim Cramer writes about all the stock trades in his charitable trust for TheStreet.com in Action Alerts Plus. Recent stocks he's traded in this account include Schering-Plough (SGP) , Yamana Gold (AUY) - Get Report and Deere (DE) - Get Report.

At the time of publication, Cramer had no positions in the stocks mentioned.

Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for

Action Alerts PLUS. Watch Cramer on "Mad Money" weeknights on CNBC. To order Cramer's newest book -- "Jim Cramer's Stay Mad for Life: Get Rich, Stay Rich (Make Your Kids Even Richer),"

click here. Click

here to order "Mad Money: Watch TV, Get Rich," click

here to order "Real Money: Sane Investing in an Insane World," click

here to get "You Got Screwed!" and click

here for Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he appreciates your feedback and invites you to send comments by

clicking here.

TheStreet.com has a revenue-sharing relationship with Amazon.com under which it receives a portion of the revenue from Amazon.com purchases by customers directed there from TheStreet.com.