WASHINGTON - The sudden departure of board member Pierce Roberts from XM Satellite Radio, citing worries over expenditure, highlights an issue that has brought many XM investors out in cold sweats.
Are the huge sums spent to build the company's brands and produce high-quality programming justified, given its lack of profits?
XM last week disclosed that Roberts abruptly resigned in the wake of a board meeting in which he urged the Washington-based satellite-radio company to slash marketing and programming costs.
In his resignation letter, Roberts said he was "troubled about the current direction of the company" and predicted that there is "a significant chance of crisis on the horizon."
News of the letter caused XM shares to drop $1.27, or 5%, to $23.98.