Satellite Launch Lifts Sirius’ Shares

Shares of Sirius Satellite Radio Inc. on Monday rose 8.5% after the satellite radio broadcaster launched its first satellite Friday, boosting investor confidence in the company, analysts said.

Sirius shares rose $3.75 to close at $48.06 on Nasdaq. They’ve gained 39% in the last year. Sirius launched the first of three satellites Friday, which will provide commercial-free radio to customers in North America this year. The satellite was launched on a Proton rocket from Baikonur Cosmodrome in Kazakhstan.

New York-based Sirius is building a satellite-based system to transmit as many as 100 channels of music and other programming to motorists in the U.S. Sirius said it has raised $1.45 billion and is fully funded. Sirius’ successful launch raised investor confidence after problems with rocket launches in last years cast doubt on the future of satellite networks, analysts said.

“As Sirius starts to get the risk of launch failures out of the stock, investors will start to step up,” said William Kidd, an analyst at C.E. Unterberg, Towbin, who has a “strong buy” rating on the stock. “We expect the shares to do extremely well because of that.”

Globalstar Telecommunications Ltd., a satellite telephone company, lost 12 satellites when a rocket carrying them crashed in Kazakhstan in 1998, delaying the start of its service by about three months. Boeing Co.’s Sea Launch venture, which sends up satellites from a converted oil rig in the ocean, failed in March while launching a satellite for satellite phone company ICO Global Communications Ltd.

ICO filed for bankruptcy in March and is being reorganized with backing from cellular telephone entrepreneur Craig McCaw.

Sirius’ satellite launch and financing also put it ahead of sole competitor XM Satellite Radio Holdings Inc., which plans to launch its service in June 2001.

Sirius has agreements with DaimlerChrysler, BMW, Ford Motor, Alpine Electronics, Audiovox, Delco, Kenwood and Panasonic.