4 Things You Didn't Know About Sirius XM
As I detailed in this article, Sirius XM Radio is one of the fastest-growing companies on the market today. Over the past five years, revenue has ballooned by 104.4% from $1.66 billion in 2008 to $3.4 billion in 2012, and appears to be on track to hit the $3.8 billion that analysts expect. On top of this revenue growth, Sirius XM Radio has been successful in finally turning a profit after several years in the red. Net income increased from $5.3 billion in 2008 to almost $3.5 billion in 2012. Because of its blowout growth, the company has become one of the market's favorite stocks. Daily trading volume regularly surpasses the 30-million share market.
However, with such growth, investors sometimes become numb to the "finer" things in life, such as the interesting facts surrounding the company that have helped to make it what it is today. It is with this in mind that I compiled a list of four things you most likely don't know about the world's largest provider of satellite-distributed radio. I hope you enjoy!
Sirius was started by NASA! Well... not really
One of the interesting things I discovered about Sirius is that it can be traced back to NASA... kind of. You see, while NASA wasn't responsible for the development of the company, it did serve a significant role in the inspiration of one of its co-founders: Robert Briskman.
In 1959, as NASA was being founded, Briskman became an employee there. He eventually moved up to the level of Chief of Program Support. After leaving NASA, he eventually found his way to Geostar where its then-CEO, Martine Rothblatt, and David Margolese teamed up with him to start Satellite CD Radio. Although Briskman wasn't the company's first CEO, he did end up developing some of the early technology that it would implement as the years progressed. While Rothblatt left the company in 1992 and Margolese left in 2001, Briskman has remained at the company where today he serves as a Technical Executive.
Sirius shared the same launch location as Sputnik
In 1957, at a Soviet facility in Kazakhstan, Sputnik, the world's first satellite, was launched into orbit. This lone event triggered the space race between the United States and the Soviet Union, the world's two largest superpowers following the end of World War II. Even though the Soviet Union had a head start, the United States ended up "winning" when it succeeded in making the first manned moon landing in 1969.
43 years after this historic launch, in July of 2000, Sirius used the same launch location that the Soviet Union did in sending up its first satellite into orbit. This was followed up by two other successful launches (the last being in December of that year) that ultimately gave Sirius three satellites from which to broadcast its soon-to-come radio programs.
Sirius was the unpopular little brother
In addition to being founded in 1990, two years after the founding of XM Satellite Radio, Sirius was also less popular than this competitor. This was despite Sirius having three satellites in orbit before XM launched either of the two it planned to put in commission.
The primary reason behind this can be chalked up to unplanned delays in the reception of microchip sets that Sirius ordered from Lucent Technologies in 2001. As a result of these delays, the company failed to meet its summer launch deadline. Instead, it launched in February of 2001. By this time, XM had launched its two planned satellites. By 2003, XM boasted 500,000 subscribers compared to Sirius's 75,000. Narrowly escaping bankruptcy, Sirius saw itself moving forward successfully. The Sirius subscriber base swelled to 261,000 by January of 2004, but still fell short of XM's 1.36 million subscribers.
Howard Stern and Ford likely saved the company
Despite a seven-year, $220 million contract with the NFL that was made official in 2003, Sirius reported greater and greater losses every year. In an attempt to boost its subscriber base, the company signed a five-year, $500 million deal with Howard Stern. According to this source, the deal was three times greater than what XM was willing to pay and required the company to assume $200 million in debt and to issue another $121 million in shares.
Following the recruitment of Stern, who began performing for Sirius exclusively in 2006, Ford Motor Company agreed to include Sirius radios in at least 20 of its 2006 and 2007 models, a deal that would come to make up a fourth of its radio sales. This deal helped propel Sirius into the mainstream as it believed as far back as 2000 that listeners would likely tune in while driving rather than when at home.
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The article 4 Things You Didn't Know About Sirius XM originally appeared on Fool.com.Daniel Jones has no position in any stocks mentioned. The Motley Fool recommends Ford. The Motley Fool owns shares of Ford. 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.
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