shares dip as another director quits and subscriber growth slows to a crawl.
The Washington, D.C., pay radio shop says George Haywood stepped down from the board Tuesday for personal reasons. Haywood, a former private equity investor, is the second director to leave XM's board this year.
The news comes as XM posted weaker-than-expected subscriber gains. For the third quarter, the broadcaster says it added 285,000 net new users, giving it a total of 7.18 million subscribers.
In July, XM cut its year-end subscriber guidance by a million to about 8 million. At that time the company said it had "more than 7 million" subscribers. The company says it will end the year with total subscribers between 7.7 million and 8.2 million.
The paltry subscriber growth reflects the shift in market share gains to rival
. In the second quarter, for example, Sirius racked up more than 600,000 net new users. Notably, though, Sirius adds new unsold cars to its subscriber count, while XM doesn't.
XM also says it stopped counting some rental cars in its user total. This adjustment accounted for about 20,000 subscriptions removed from the third quarter total, the company said.
In February, board member Pierce "Jack" Roberts jumped ship after failing to convince executives that the company's cash burning strategy was in danger of running out of control.
XM says it has notified the Nasdaq that it is now not in compliance with rules that stipulate that the board have a majority of independent directors. The company says it plans to elect replacements at the next annual meeting.
Shares of XM fell 30 cents to $12.28 and Sirius jumped 8 cents to $4.15 in pre-market trading Wednesday.