Sirius Glitters After Milestone
Updated from 10:19 a.m.
Sirius
(SIRI) - Get Report
shares surged 11% Tuesday, hitting a two-year high, as the company stayed on track to reach a looming subscriber goal.
The New York satellite radio shop says it passed the 800,000-user mark Monday and expects to reach 1 million subscribers by year-end. The stock, which fetched less than $2 a year ago, jumped 67 cents to $6.64 in midday action.
The pay-radio broadcaster has made a splash in recent weeks as it seeks to enter the media big leagues. Last week, Sirius hired former
Viacom
(VIA) - Get Report
exec Mel Karmazin as its new chief, pushing former CEO Joe Clayton up to chairman.
Last month, the company signed shock jock Howard Stern to a $500 million contract starting in 2006.
Sirius got a late start in the satellite radio business and lags behind rival
XM
(XMSR)
by about one year. XM, which has more than 2 million subscribers, rose $1.38 to $36.10 Tuesday, putting it near a 52-week high as well.
Sirius expects to sign on more than 200,000 new users in the next month as holiday gift-buyers hit the market.
"Sirius is on a roll," Karmazin said in a press release Monday. "We are very excited about this upcoming holiday season, now that we have such a wide array of innovative products on retail shelves."
Karmazin appears to be betting on Sirius' success. On Friday, Karmazin bought 1.5 million shares of Sirius at $5.36, a purchase worth $8 million. Karmazin also has options on 3 million additional exercisable shares, according to a federal filing. The executive has some 30 million shares underlying options that haven't yet vested.
