Sirius XM Radio (SIRI) has made an almost miraculous comeback from irrelevancy (and penny stock land) over the past few months.  SIRI has seen its stock rise from the low $.50′s at the end of 2009 to a recent high of around $1.15 just a few days ago.  This was very good news for the company.  Since it was facing a NASDAQ delisting and with the stock trading above the magic $1.00 mark for a period of time, SIRI was thinking it was “scot-free”.  Think again.

Last week’s drop (and this week’s continuing drop) was not surprising given the overheated condition of the stock from all indicators.  It is not clear what effect short sellers had in the decline since the short squeeze had been on for many months with the advance of the stock price.  SIRI fought through all of those challenges….that is until now.

SIRI has one more chance to regain compliance with NASDAQ regs if it can trade above $1.00 for 10 consecutive days before the March 15th date imposed by the exchange.  I don’t see that happening.  The reverse split that has been discussed seems the only option now despite management’s contention that they will be able to get a variance on appeal.  NOT BLOODY LIKELY.

SIRI should have executed the reverse split when they were so strong late last year.  The market was really pumped on SIRI and its progress.  Institutions were buying and retail investors were very happy with the run-up.  Now with a delisting notice sure to come, short sellers will be circling SIRI like sharks looking for blood.  I think the short term outlook for SIRI is definitely bearish.

Here is a chart that shows what I mean.

Is SIRI a dead dog?  Will shorters drive this one right back down to 50 cents (or lower) again.  I don’t think so.  SIRI is in a “stew of its own making”, but I think will be a good stock to buy on dips.  Right now, I would hold off (unless you are shorting the stock).  The boards and investor sentiment are telling me that this one has farther to fall.  Retail investors might not like it when they do the reverse stock split, but IMO it is inevitable.

Do your own due diligence.  It continues to be a hot topic on the boards that I monitor and it is fun to read what people write.  Make up your own mind.

Good luck and good trading,

Jeffrey Dean

Editor-in-Chief

—————————————————————————————————————————————————

<!– /* Font Definitions */ @font-face {font-family:”Cambria Math”; panose-1:2 4 5 3 5 4 6 3 2 4; mso-font-charset:0; mso-generic-font-family:roman; mso-font-pitch:variable; mso-font-signature:-1610611985 1107304683 0 0 159 0;} @font-face {font-family:Cambria; panose-1:2 4 5 3 5 4 6 3 2 4; mso-font-charset:0; mso-generic-font-family:roman; mso-font-pitch:variable; mso-font-signature:-1610611985 1073741899 0 0 159 0;} /* Style Definitions */ p.MsoNormal, li.MsoNormal, div.MsoNormal {mso-style-unhide:no; mso-style-qformat:yes; mso-style-parent:”"; margin:0in; margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:”Times New Roman”,”serif”; mso-fareast-font-family:”Times New Roman”;} .MsoChpDefault {mso-style-type:export-only; mso-default-props:yes; font-size:10.0pt; mso-ansi-font-size:10.0pt; mso-bidi-font-size:10.0pt;} @page Section1 {size:8.5in 11.0in; margin:1.0in 1.25in 1.0in 1.25in; mso-header-margin:.5in; mso-footer-margin:.5in; mso-paper-source:0;} div.Section1 {page:Section1;} –>

DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS REPORT. We are not registered as a securities broker-dealer or an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority. We are neither licensed nor qualified to provide investment advice. Neither InvestorSoup.com nor its affiliates have a beneficial interest in the mentioned company; nor have they received compensation of any kind for any of the companies listed in this communication. The information contained in our report is not an offer to buy or sell securities. We distribute opinions, comments and information free of charge exclusively to individuals who wish to receive them.