Howard Stern

BOSTON

Shares of Sirius XM Radio Inc. slid Wednesday after Howard Stern sued the satellite radio provider and at least one analyst cut his rating on the stock.

THE SPARK: Stern and his agent sued Sirius XM Radio on Tuesday, alleging the company failed to pay stock awards they said are due for helping the company exceed subscriber growth targets. New York's Sirius XM had just signed Stern to a second five-year contract, and said it was "surprised and disappointed" by the lawsuit. The company said it lived up to obligations of their previous deal.

THE BIG PICTURE: Stern maintains his show's popularity put the company on track to become the nation's dominant satellite radio service. He also says he put Sirius in a position to complete its 2008 acquisition of XM Satellite Radio Inc., which had also courted Stern years earlier.

THE ANALYSIS: Wunderlich Securities analyst Matthew Harrigan cut his rating of Sirius XM on Wednesday to "hold" from "buy," and lowered his price target for the stock to $1.65 from $2.

The stock's current price "likely cannot accommodate the uncertainty engendered by the suit -- even if it ends up being meritless," Harrigan wrote in a research note.

SHARE ACTION: Shares of Sirius XM fell 6 cents, about 3.4 percent, to $1.65 in morning trading. The stock has traded in a 52-week range of 82 cents to $1.88.