SIRI: Insta-Hype

Take a look at the insta-hype associated with Sirius Radio and XM following their announcement on Thursday that they will be providing service on Apple's iPhone. The stock jumped immediately after the announcement, and then flattened out. There are reasons for this, and I'll make them quick: Sirius must sell a product. This is not merely an App on the iPhone. App writers get royalties, but do not have $550 million in debt. Sirius must sell subscriptions on the iPhone in order to turn a profit off this. Herein lies the problem. iPhone users already have other Radio-based apps available--for free! Why would an iPhone user (who is mainly net-neutrality based to begin with, and very anti-big-business at heart...i.e., Apple users usually are!) pay extra per month to get something they can already get for free? The insta-hype drove the price up but it will not last. Watch for this stock's price to return to its average that we have seen for the last month--about $0.11-13.