On December 13, Sirius XM Holdings successfully launched its SXM-7 satellite. In-orbit testing of the satellite began on January 4, 2021.
Something went wrong. Now, Sirius XM is assuring consumers and investors that it “does not expect” its satellite radio service to be impacted by “adverse SXM-7 events.”
In a regulatory filing, the company said that during in-orbit testing of SXM-7, “events occurred which caused failures of certain SXM-7 payload units.”
The brief note, signed by EVP/General Counsel Patrick Donnelly, adds that an evaluation of SXM-7 is underway. “The full extent of the damage to SXM-7 is not yet known,” Sirius XM notes.
But, any damage is not expected to threaten Sirius XM’s services.
“We do not expect our satellite radio service to be impacted by these adverse SXM-7 events,” the company said in the filing, made Wednesday. “Our XM-3 and XM-4 satellites continue to operate and are expected to support our satellite radio service for several years. In addition, our XM-5 satellite remains available as an in-orbit spare. Construction of our SXM-8 satellite is underway and that satellite is expected to be launched into a geostationary orbit later this year.”
Furthermore, Donnelly said that Sirius XM purchased insurance policies covering SXM-7 through launch and the first year of in-orbit operation.
“The aggregate coverage under those insurance policies is $225 million,” he said. “We have notified the underwriters of these policies of a potential claim with respect to SXM-7.”
While overall indices were down sharply on Wall Street as the Federal Reserve Bank noted the pace of the COVID-19 recovery has “moderated,” sending the Dow Jones Industrial Averge down 646.21 points as of 3:30pm Eastern, Sirius XM shares were up 5.6%, to $6.91. Volume was exceptionally heavy at 131.06 million shares; average volume for SIRI is 24.46 million shares.
It’s a COVID-19 era high for SIRI, as it is at its highest value since mid-February 2020.