It Pays to Talk Dirty

George Carlan, in a famous comedy routine, said there were seven dirty words you couldn't say over the air waves so they must be "reeeeally bad." Now that Sirius Satellite Radio (SIRI) has ponied up $500 million and another $200 million in stock, Howard Stern can utter fuck, asshole and whatever he wants to a bunch of like-minded listeners in what Stern brands as the best radio ever.

While Howard has escaped the scrutiny of the Federal Communication Commission (FCC) and thinks he's making a statement about freedom of speech, Sirius shareholders may be in for a rough ride. After the October 2004 announcement of the five-year deal with Stern, SIRI nearly tripled in price by December on the anticipation of a flood of new subscribers. Then reality set in and the stock came down.

So where is the stock headed from here? Unless SIRI starts to makes money soon, investors are not likely to bid it up to previous levels anytime soon. After all, there are only a limited number of people willing to pay good money to listen to Stern's 13-year old humor. Stay tuned - but maybe to XM Satellite Radio (XMSR) instead.

Posted January 15, 2006.