Hopes Smashed: Sirius XM Satellite (SIRI) Investors Get Double Whammy

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June 18, 2009 5:04 PM EDT

Sirius XM Radio (Nasdaq: SIRI) launched its iPhone app today to much anticipation. In fact, shares of SIRI rose 23% yesterday in anticipation of the feature. This was the biggest move in the beaten-down stock in months. But today users and investors were disappointed. Users were upset that shock-jock Howard Stern wasn't available. Investors were disappointed as the shares ended down 14%, giving back a majority of yesterday's gains.

Adding insult to injury, Sirius investors got a double-whammy after the close. Data showed that five Sirius executives used the recent pop in the stock to dump shares. CFO David Frear sold 191,260 shares, VP Dara Altman sold 136,620 shares, Officer Scott Greenstein sold 232,250 shares, VP Patrick Donnelly sold 232,250 shares, Officer James Meyers sold 273,230 shares. OUCH!

I had high hopes for the Sirius iPhone app and it is pretty nice. I'm not a big Stern fan, so no big deal there, but I was hoping CNBC would be on the app. It's not, but they have Bloomberg news and I have to admit that I was impressed. As I walked up to my office I had the radio on and was able to catch a few good tidbits during that 5 minutes that I normally wouldn't have. One potentially BIG problem though is that when the radio was on I was not able to receive phone calls (went right to voicemail) or texts. I don't know if this was a bug or if the technology doesn't allow it. Either way it is not good.

I give the Sirius app a "B-", nice but not a game changer.

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