XM Radio programs another stock sale
The company plans to raise between $167 million and $193 million, which should keep it funded through at least the second quarter of next year, a representative says.
The money should keep the company funded through at least the second quarter of next year, according to a company representative.
An XM representative did not comment Monday, citing a "quiet period" before the offering, which hasn't been scheduled. But the company said in Securities and Exchange Commission (SEC) filings that it needs between $40 million and $65 million to keep operating through the fourth quarter.
"Although our system is substantially completed, we expect to incur significant operating losses for the next few years as we seek to increase the number of subscribers and develop a stream of cash flow sufficient to cover operating costs," XM said in its Monday SEC filings.
The company has been experiencing problems with its two satellites in orbit. Their solar-power panels are apparently breaking down, which could pose a problem in the second half of this decade. XM has already built a spare satellite, but has yet to launch it.
"We believe that we will be able to launch additional satellites prior to the time the solar-power problem might cause the broadcast signal strength to fall below acceptable levels," XM said in the SEC filing.
The company has already raised about $1.6 billion. An initial public offering in 1999 raised about $167 million. General Motors, American Honda, Clear Channel, Hughes Electronics and DirecTV are among the investors in the company.
General Motors made XM radios available as an option in Cadillac Sevilles and DeVilles last fall, and announced that it will expand to over 21 additional models this year. Audi, Nissan and Volkswagen of America intend to offer the radios in some of their future cars, according to SEC records. Isuzu this month began offering to install XM radios in certain models.