Friday, December 10, 2004


This morning I sold one third of my position in SIRI for $7.58. These shares were purchased for $2.08. Now I have my cash back and a few hundred shares as a bonus. I planned to hold all for the long term but there are simply too many people piling on to this "hot" stock.

I used the proceeds to add to FON. NXTL is a well managed company and it has been an excellent investment. It leads the industry in customer retention, customer growth and average usage per customer. I see the purchase of FON as a way to buy more NXTL cheaply. I suspect the final purchase price will push FON to maybe $29. There are three probable outcomes: 1) another bidder will compete with NXTL and push the price higher, 2) NXTL will buy the company and I will gain more NXTL at a low price, 3) the deal will fall through and FON will continue as an independent company. The third scenario would initially be disappointing but I believe Sprint has a good business strategy and am comfortable owning the stock.

I have talked with the owner of a monitored account and she plans to call today to sell half of her SIRI and to purchase FON.