Sirius Stock Higher on Products, Upgrade

NEW YORK (AP) -- Sirius Satellite Radio Inc. closed up 14 percent Wednesday following an analyst upgrade, news of a new Sirius satellite radio by Sanyo in Wal-Mart stores, and plans to launch new products.
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The company's shares rose after Bear Stearns upgraded the stock to "Outperform" from "Peer Perform" and issued an optimistic report about pending new products from the company. The second-largest U.S. satellite radio provider plans to introduce eight receivers at a New York City event that it hopes will generate enough sales to push subscribers past 1 million. The company recently said it had more than 600,000 subscribers.

The investment bank said the receivers might be the technological break the firm needs to shore-up its rivalry against XM Satellite Radio Holdings Inc. -- even if it remains No. 2. XM currently has more than 2.1 million subscribers in the United States.

"Satellite radio has been one of the shining stars over the last 12 months and doesn't show any signs of slowing down," said Bear Stearns analyst Robert Peck in the report. "We think investors should think of Sirius as Pepsi in this duopoly and not Betamax."

Even as the secondary brand, Peck said he sees the company capturing 40 percent of the market and coexisting much like PepsiCo Inc. does with Coca-Cola Co.

Included in the company's new technology is its Sirius Sportster model that will retail for $150 -- a price Sirius executives hope will increase its subscribers.

The company also got a boost after Sanyo said it would sell its Sirius receiver at Wal-Mart Stores Inc. that will retail for $149.99. The product is the first plug and play system that will include home and car kits in the same package, Sirius said.

The report from Bear Stearns said the company doesn't really need to top XM. Technology making Sirius' programming more accessible should keep the company viable in the long-haul.

Sirius has been adding more sports coverage to its menu of programs, including live broadcasts of college football games. The company also signed a seven-year contract with the National Football League, paying $188 million in cash and some $23 million in stock to get exclusive rights to broadcast games.

Shares of Sirius rose 4 cents to $3.06 in after-hours trading after closing up 37 cents at $3.02, off its 52-week high of $4.20 from January. Bear Stearns said it believes the company's shares should be trading at about $4.40 next year.

XM Satellite Radio shares finished at $30.30, up 16 cents, or less than 1 percent on the Nasdaq.