XM Satellite Radio has announced an initial $25 million investment in international satellite radio broadcaster WorldSpace, which currently targets Africa and Asia. The XM investment isn't raising man

XM Satellite Radio has announced an initial $25 million investment in international satellite radio broadcaster WorldSpace, which currently targets Africa and Asia.

The XM investment isn't raising many eyebrows on Wall Street. "It’s such a small deal," one analyst commented to Billboard.biz shortly after the deal was announced Tuesday morning (July 19), "but it puts [XM] in the flow," meaning the investment gives XM a strategic alliance with the industry's oldest satellite radio broadcaster and one that operates in the more-efficient L-band of the radio spectrum.

WorldSpace also has filed paperwork with the SEC for an initial public offering in the U.S.

Along with making the initial $25 million investment in WorldSpace stock, XM said it will receive warrants to acquire another $37.5 million in WorldSpace stock "and an option to invest along with WorldSpace and other partners in various countries around the world."

XM also said it will "cooperate with WorldSpace to develop satellite radio products, technology and distribution and supplier networks."

In a prepared statement, XM chairman Gary Parsons said, "We look forward to becoming a strategic investor in WorldSpace's worldwide satellite radio system and advancing satellite radio technology and reach through our cooperative efforts."

"The key to this deal is to look at the enterprise value for Worldspace, and I just don't have that number right now," the analyst, said, speaking on condition of anonymity.

Enterprise value is the sum total of a company's accumulated losses and its total market capitalization. The latter figure, market cap, is a function of the number of shares of stock outstanding, multiplied by the daily share price.

That number will fluctuate for XM and its competitor, Sirius, because the number of shares outstanding and the daily share price can each fluctuate over time.

The enterprise value for XM is currently about $14 billion, based on a market cap of $11.8 billion and accumulated losses of $2.2 billion. For Sirius, the figure is closer to $11.1 billion, based on a market cap of $9.06 billion and accumulated losses of $2.06 billion.

The Wall Street analyst put Worldspace's total accumulated losses at "about $2.1 billion" and then characterized the XM investment as "a drop in the bucket."