Sirius XM Is Cutting a Cake
Sirius XM Radio's first Howard Stern Birthday Bash may also be its next-to-last Howard Stern Birthday Bash.
Bringing back an event that used to be a tradition during his terrestrial radio days, Stern's birthday celebration in January will be a star-studded affair that's broadcast on his channel. Jimmy Kimmel will be hosting the on-air soiree, and details of the venue, celebrity guests, and ways for listeners to win invitations will be trickling in during the coming weeks.
Stern will be turning 60. That's a pretty big deal. It's surprising that Sirius XM didn't bring back this tradition sooner since the polarizing yet ultimately magnetic radio icon has celebrated eight birthdays since joining Sirius XM in 2006.
Listeners may not want to get too attached if the event's a hit since Stern will have just one more birthday to go under the terms of his current five-year deal with Sirius XM that expires at the end of 2015.
That may seem pretty far away, but Sirius XM investors may as well start assessing the situation. The company's guidance is calling for revenue growth to decelerate to just 6% next year and that's with a small price increase kicking in come January. It won't provide a preliminary read on 2015 until the latter half of next year, but the real question now will be how Sirius XM can square away growth come 2016 if Stern walks at the end of his contract.
He probably won't come back. He will be about to turn 62 at that point, and he was public about his reservations of signing the current contract extension three years ago. He's earned a cozy retirement where he doesn't have to wake up early several times a week. Even with the live shows seemingly fewer in number now than during his terrestrial years, it's a safe bet that Stern will want to retire while he still has the capacity to enjoy his golden years.
Sirius XM has evolved over the years. It's no longer all about Stern. However, it would be naive to think that subscriptions won't take a hit if he leaves the airwaves without a suitable replacement. That hunt probably can't begin soon enough. Sirius XM won't want to wait until the end of 2015 to make that happen. The stock has already shed 13% of its value since peaking two weeks ago, fueled largely by its decelerating growth projections. The last thing it wants is to cast more doubts about its growth potential.
Sirius XM may be cutting a cake during a celebrity-studded party in two months, but it shouldn't be just Stern playing America's Got Talent these days.
Sirius XM wants more skin in mobile, but here's one unlikely stock idea in this space
Want to get in on the smartphone phenomenon? Truth be told, one company sits at the crossroads of smartphone technology as we know it. It's not your typical household name, either. In fact, you've probably never even heard of it! But it stands to reap massive profits NO MATTER WHO ultimately wins the smartphone war. To find out what it is, click here to access the "One Stock You Must Buy Before the iPhone-Android War Escalates Any Further..."
The article Sirius XM Is Cutting a Cake originally appeared on Fool.com.
Longtime Fool contributor Rick Munarriz has no position in any stocks mentioned, and neither does The Motley Fool. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
