Updated from May 11

Sirius

(SIRI) - Get Report

passed a milestone Tuesday with its 400,000th subscriber.

The news comes just weeks after Sirius disappointed Wall Street with a weak first-quarter subscriber addition number. The company added 90,602 new customers in the quarter ended March 31, taking its subscriber count to 351,663. But Wall Street analysts had expected the company to expand its rolls by something like 110,000 subscribers.

On Wednesday morning, Sirius shares rose 7 cents in early trading to $3.22.

The New York company and its Washington, D.C., rival,

XM Satellite Radio

(XMSR)

, charge $10 and up for monthly subscriptions to their mostly commercial-free radio broadcasts. The programming is broadcast from satellites to special receivers mounted in vehicles or homes.

Shares in Sirius and XM surged last year as investors leaped aboard the satellite radio bandwagon. Bulls believe the medium has nearly unlimited growth potential, and seize on the companies' fast-expanding subscriber rolls as evidence. XM passed a million subscribers last year and added some 320,000 on a net basis in the latest quarter.

But bears note these outfits'

cash-burning ways and wonder if the business can ever expand to the point where either company, let alone both, is consistently profitable. Meanwhile, some observers are

starting to wonder if the companies' subscriber growth figures are completely reliable.

Shares in both companies have

come under some pressure this year as investors worry about their soaring valuations and a possible rise in interest rates this summer.

"Reaching the 400,000 subscriber mark is another important milestone for Sirius as we continue to grow our business and move closer to our target of one million subscribers this year," said CEO Joseph Clayton.

Shares in both companies jumped Tuesday during the

Nasdaq

bounceback. XM rose $1.78 to $23.40 and Sirius added 21 cents to $3.15.