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Sirius said last week on its earnings call that the Chrysler bankruptcy is bad news for the satellite radio operator. In an SEC filing this morning, the company added some numbers to that statement, saying Chrysler accounted for about 900,000 subscriber additions in 2008, or 16 percent of the company’s total gross new subscribers.
Bankruptcy proceedings tend not to drag on for a full year, so a temporary closing of Chrysler’s plants would likely mean that the carmaker could still potentially deliver some new subs, but a reduced number over last year. Sirius goes on to say in the filing that its agreement with Chrysler could be rejected as part of the proceedings, in which case the carmaker would cease to be a feeder of new subs for Sirius (NSDQ: SIRI). The company says in the filing it has no reason to believe that such a rejection is likely.
Chrysler declared bankruptcy on April 30, 2009. The announcement came after Sirius was able to successfully manage its debt challenges at the time by taking an investment from Liberty Media (NSDQ: LINTA) and
has reported subscriber losses the past two quarters reported subscriber losses in the first quarter 2009 after a steep drop in subscriber additions in the fourth quarter 2008 due to consumers tightening their belts in the tough economy.