Sirius ( SIRI) investors were just enjoying the ride Tuesday after Ford ( F) agreed to offer the company's pay-radio service in some 2004 models. Shares of the premium radio broadcaster rose 7 cents, or 7%, to $1.14, while rival XM Satellite Radio ( XMSR) jumped 30 cents, or 3%, to $10.29 in midday trading Tuesday. Bulls have crowded into the two stocks of late, attracted by the growth prospects of a still-cultish tech story. Like its rival, Washington-based XM, New York-based Sirius sells over 100 channels of radio programming on a subscription basis. The companies have been lining up allies and building subscriber lists that backers say will lead to big financial gains in coming years, but bears focus on the companies' cash-burning ways and on barriers to broader distribution. Tuesday's agreement allieviated worries on Wall Street that Sirius' recent financial troubles had jeopardized a preliminary pact with the big U.S. carmaker. While the spelled-out Ford arrangement calls for dealer-installed radios rather than factory installation, the latest development will add some popular SUVs and luxury cars to the Sirius lineup. The Ford-Sirius pact completes the pairings between the satellite radio companies and large auto manufacturers. For the time being, all of the big carmakers and retailers have joined one of the two rival satellite radio camps. Last week, XM won a distribution arrangement with the world's largest retailer, Wal-Mart. XM has key partnerships with auto giants GM, Toyota and Honda. Sirius has Nissan, BMW, DaimlerChrysler and now a detailed linkup with Ford. Sirius also has retail alliances with Sears, Best Buy and Circuit City. Sirius completed a $1.2 billion recapitalization in March, converting most of its debt into common stock. The company, which reports earnings Wednesday, had about $300 million in cash at the completion of its refinancing.
Even though AT&T tried a last-minute bribe of promising 5,000 new U.S. jobs to help gain support for the deal, the Justice Department filed a complaint to fight the combination of the nation's No. 2 and No. 4 wireless carriers.