ANGRYTOWN, U.S.A. ( TheStreet) -- Sirius ( SIRI) fans came out in force after we put our favorite satellite radio shop at the top of the five tech stocks doomed to fail in the next downturn. Sirius, as the story pointed out, turned another corner this year by extending its losses not just in dollars, but now in hundreds of thousands of subscribers. The pay radio player is on track to lose 1.6 million customers as car sales slump in 2009. This doesn't bode well for the stock. Tech's hottest cash fire, we wrote, had finally reduced its stock to embers. Michele G. from Wisconsin wrote that we had failed as journalists. "Your role should be to provide information from all perspectives to allow the reader to come to their own conclusion. If you don't do this you have an ulterior motive and have violated ethical standards." Michele's feedback is a somewhat high-minded version of the usual evil-intent accusations. One might argue that creating the illusion of balance in a story listing stocks to avoid is somewhat similar to selling luxury services like pay radio during frugal times. So to be fair, yes, Sirius could sidestep the collapsing auto industry, it could dodge the ad spending slowdown, it could stem some of its subscriber losses, and the company could even lower the flames in its cash furnace. But the point is, Sirius has serious financial challenges that would be extraordinarily difficult to overcome if the economy continues to tank.
Another reader, John, location unknown, raises a fair question: How can you project a negative subscriber number for the whole year based on one quarter's numbers. The simple, snarky answer is multiply by four. But to John's point, right or wrong, a quarter's numbers can help project a yearly run rate. The key assumption is whether the conditions in the first quarter will continue to the next quarters. With more than half of Sirius' new subscribers coming from car sales and new cars delivered to dealer lots, it's not easy to believe customer growth is all that healthy. Sirius lost 404,422 customers in the first quarter as the auto industry shrank. In the second quarter, when GM followed Chrysler into bankruptcy, it's conceivable that Sirius did even worse on the subscriber front. Sirius argues that fewer car customers mean lower subscriber acquisition costs, but that's sort of like saying you are saving money on your commuting costs after you lost your job. And finally, getting his two-cents in, Mike F wrote that we had already reported the tough year ahead for Sirius' subscriber losses in June when the stock was at 35 cents. The stock, he points out, is now at 43 cents. Obviously there's still some heat in those embers, just try not to get burned. Reported by Scott Moritz in New York