NEW YORK – Sirius Satellite Radio Inc. (SIRI) CEO Mel Karmazin sought to allay shareholder concerns at the company's annual meeting Thursday, saying he was just as disappointed as other investors in Sirius' lagging stock price. Compared to rival XM (XMSR), however, he said: "We suck less."
Karmazin, addressing shareholders at an auditorium in midtown Manhattan, acknowledged that he was "real unhappy" with the company's stock price, but he stressed that he has not sold a single share of the roughly $20 million of his own money he has invested.
Sirius stock has fallen consistently since early 2006, when it opened the year trading at $6.70, and has been below $3 since early May. On Thursday it edged up 4 cents to $2.90.
Karmazin noted that Sirius' shares were up just 8 percent since September 2004, when the satellite radio service had just 600,000 subscribers, compared to the roughly 6.5 million it has today.
But Karmazin noted that wasn't nearly as bad as the 61 percent decline over the same period posted by the shares of rival XM Satellite Radio Holdings Inc., which Sirius has agreed to acquire. The stock deal was valued at $4.7 billion when it was first announced Feb. 19, though today it would be worth $4.1 billion.
Karmazin blamed the poor performance of the stocks on Wall Street's negative view of the satellite radio business, despite the progress both companies have made building their subscriber bases and getting closer to profitability. Both Sirius and XM continue to lose money as they invest in acquiring subscribers and beefing up their programming lineups.
Karmazin also defended Howard Stern's $500 million pay package signed with Sirius in 2004, saying: "He earned it."
Karmazin, a longtime radio executive and former president of the media conglomerate Viacom Inc., acknowledged that Sirius and XM had an "uphill battle" to get their combination approved. Traditional radio broadcasters have been lobbying against the deal.
A shareholder asked whether Sirius would consider hiring Don Imus, who was fired by CBS Corp.'s (CBS) radio division after making racially charged comments about the Rutgers University women's basketball team. Karmazin responded that he hadn't been talking to Imus but thought it was a "disgrace" the way Imus had been forced out. Karmazin noted that he was a "significant" contributor to Imus' charity ranch for kids with cancer.