EarningsCenter

Message from Short Sellers: Dump Sirius

Sirius XM Radio (SIRI) is one of the most actively traded stocks in America turning over 56 million shares a day. The satellite radio firm's stock is up 70% during the last year, and its price has broken $2 for the first time in recent memory.

Short sellers have signaled it is time to dump Sirius shares. The short position in the stock as of April 15 was 270.3 million shares--the highest of any Nasdaq listed firm--which is about 7% of the stock's float. Short interest rose 1.9% over a two week period.

The cult stock that has fascinated retail investors for years as they have bought the shares as a proxy for the satellite radio business. It was assumed five years ago that satellite radio would continue to add subscribers as drivers abandoned over the air stations. The growth came at the cost of over $2 billion in debt taken on by the firm. Sirius could not carry the load and nearly went bankrupt in February 2009 .

Sirius CEO and radio management legend Mel Kamazin were able to set a debt and equity deal with Liberty Media that kept the company in business. That package has not answered the question of whether Sirius is a good investment.

After years of double-digit growth, Sirius's revenue rose modestly from $2,526 billion in 2009 to $2.839 billion in 2010. Income from operations rose more sharply from $228 million 2009 to $465 million last year. But, the most important measure of the firm's health--subscribers-- only rose from 18.5 million to 19.4 million based on a daily weighted count of customers. Sirius is no longer a growth company.

The hurdles to the future improvement to Sirius's fortune are formidable. Like most consumer electronics firms, it has to battle with Apple (AAPL). Many cars now have iPod adapters so people can take their favorite music with them. Many cars and SUVs have rear-seat entertainment devices. And HD radio has made the sound quality of terrestrial radio better.

It is not many years ago that Sirius and its merger partner XM had the new car entertainment business to themselves. That period is over.


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31 Comments

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az447

$2.34, "Radio Expert"...$2.34...have a nice day! :)

Would you care to admit that you're very wrong on SIRI or do you prefer to keep hiding? And what about you, Doug? Silence...sweet silence...

May 10 2011 at 4:05 PM Report abuse rate up rate down Reply
az447

$2.22, "Radio Expert"...and $2.24 in after hours...have a good weekend "Radio Expert!" :)

May 06 2011 at 6:29 PM Report abuse rate up rate down Reply
az447

$2.13, "Radio Expert"...$2.13...have a nice day! :)

May 04 2011 at 4:29 PM Report abuse rate up rate down Reply
bcopleyjigs

Thanks Douchebag Mcintyre. I'll take that with a grain of salt. Get your sirius cut off, did you?

May 03 2011 at 4:50 PM Report abuse rate up rate down Reply
CAPTKIM

Well you all can make fun of me but I thought SIRI would be a great investment and still do, I think in the hands of the right people SIRIXM could really boom. Twenty years ago I was in a near fatal accident that left me paralyzed from the waist down, Blind and deaf on my left side and many more complications to go into plus taking 20+ medications including 20 units of insulin 4 times a day. I was on the West Coast when I first heard about SIRI and being from the East Coast SIRI had not yet been introduced. I bought $10.000 worth of shares and at that time I paid some where around $34.00 a share. I still believe in SIRIXM and support them in anyway I can. ( Just in case you are wondering I was flying Helicopters for an oil company when a trainee opened a oil well and it exploded with debris strikeing the chopper and myself. GOD BLESS AMERICA

May 02 2011 at 1:37 AM Report abuse rate up rate down Reply
monteroandrw

Stop with the poor sound quality crap too....the sound has improved to the point where the complainers are full of mierda!

May 01 2011 at 9:41 PM Report abuse +1 rate up rate down Reply
monteroandrw

Take your head out of your CULO Doug, stop trying to pull a Cramer Hedge trick and just stop covering Sirius XM. We all know what you are up to. Apparently the only people who don't are the SEC, or you would be writing this crap from a 4x6 cell next to Bernie Madoff!

May 01 2011 at 9:40 PM Report abuse rate up rate down Reply
1 reply to monteroandrw's comment
smithdeane

Right on , Good Concept but run as a scam , Crooks like Howard Stern and Martha Stewart should tell people something , I went along from $1.65 to the over $9 a share and back to a few pennies and up to a buck , Had it in my truck and they tried to scam me for over $400.00 , Quit them and sold 5k shares and NEVER AGAIN will I touch this stock .

May 02 2011 at 8:39 AM Report abuse rate up rate down Reply
i67darrin

I used to be a Sirius subscriber before the XM merger. They promised and were supposed to combine the channel lineups for both companies, but never did. Instead, they keep the lineups separate for the most part in order to extract more revenue from their subscribers. That's when I bailed. Also, too much free content on internet radio to warrant paying a monthly subscription fee.

May 01 2011 at 6:09 PM Report abuse rate up rate down Reply
skinny30

I think Sirius needs to bring their customer service center(s) to the U.S. I'm sick of trying to understand someone I'm speaking to on the other end who is in Cario Egypt. I try to avoid calling at all costs since is so frustrating.

April 30 2011 at 10:44 AM Report abuse rate up rate down Reply
az447

I found this comment from a post that I believe sums things up perfectly regarding "analysts:"

"As to Barton (Lazard) Crockett’s downgrade, my opinion is that it was simply not smart. You do not do that because you are in trouble with your own analysis (Sirius hit his $2 twelve month target the day before his downgrade) and you do not do that four days before the announcement. This is demeaning to his profession. Instead of sitting tight and waiting for the results in four days he chose to rush with his cya downgrade. What kind of “analysts” are those who make moves on no news literally days before the announcement. He is covering blatantly his rear. Matthew Harrigan at Wunderlich did the same thing about a year ago. And what happened!!! Although he did upset Sirius' ten day run to $1 a few days before they were to make it, Sirius still got there a few weeks later. As the result Harrigan simply discredited himself. The same is going to happen to Crockett. They need to learn from history. These moves are unprofessional and cheap. As simple as that." - Well stated!

April 30 2011 at 5:32 AM Report abuse +1 rate up rate down Reply