Satellite radio rivals XM and Sirius both posted solid gains in subscribers yesterday – but not enough to assure jittery investors that more stellar growth is on the way.
XM further unnerved investors by announcing that another board member had resigned.
George Haywood, an independent director, said he was leaving for personal reasons but that he still supported the company’s direction.
In the subscriber report Sirius, the smaller of the two competitors, continued to narrow the gap with XM.
Sirius reported a net gain of 441,101 subscribers in the third quarter, compared with a gain of 285,000 for XM.
Overall, Sirius now has about 5 million, while XM has 7.2 million.
Both shares sank on the news. XM stock fell 62 cents, or 4.9 percent, to $11.96. Sirius, meanwhile, dropped 13 cents, or 3.2 percent, to $3.94 per share.
Haywood’s resignation called to mind an earlier director exit that got messy.
In February another board member, Pierce Roberts, left and on his way out blasted XM for spending too much on exclusive content deals, such as the company’s $55 million deal with Oprah Winfrey.
In a research note yesterday Bernstein analyst Craig Moffett wrote of the board resignation: “Though the departure appears amicable, the timing – coming without the nomination of a replacement – is once again problematic.”
The free spending on content has been a familiar gripe among Wall Streeters – with Sirius’ $600 million pact for Howard Stern leading the way.