XM Satellite Radio Thursday posted a wider loss for the first quarter and said federal regulators are investigating its marketing practices.
The shares, which are down a whopping 25% so far this year on assorted woes, closed off 4.59% at $21. They had fallen as much as 9% earlier in the day.
XM said the Federal Trade Commission is investigating whether its marketing practices are in line with rules governing telemarketing, the Truth in Lending Act and other statutes.
Company learned of the probe in a letter from the FTC earlier this week.
CEO Hugh Panero said it was a “pretty general inquiry” and execs said the company would be contacting the agency soon to inquire about their concerns.
Company also revealed that the Federal Communications Commission found one of its products, the Delphi XM SKYFi2, was not in compliance with transmitter emission standards.
XM’s net losses widened to $151 million from $122 million. Revenue, however, doubled to $208 million from $103 million as the company added subscribers.
An XM board member resigned early this year over the company’s strategic decision to sacrifice profits for market share. XM is locked in a bittter battle with smaller rival Sirius Satellite Radio.