A week after shaking off exchange listing concerns, Sirius XM Radio's
That satellite radio giant's shares have fallen daily since posting solid -- yet ultimately light on zing -- first-quarter results on Tuesday.
Date |
Close |
Change |
---|---|---|
May 4 |
$1.18 |
(4%) |
May 5 |
$1.12 |
(5%) |
May 6 |
$1.02 |
(9%) |
Source: Yahoo! Finance.
That's a sharp 17% slide over three days -- and yesterday could have been worse. The stock traded as low as $0.86 a share during yesterday's wave of afternoon panic selling, before clawing back up to close above a buck. However, today's weak start isn't helping. Sirius XM was back below the $1 mark an hour into the trading day, and it has fought to break above the $1 level throughout the day.
It's important to note that a temporary dive to the right of the decimal point won't trigger compliance issues with NASDAQ OMX Group
A reverse split would erase any possibilities of being booted from the exchange, but Sirius XM CEO Mel Karmazin is adamant about avoiding a split unless it's the only way to spare an exchange delisting. That's a noble approach, but Karmazin's stubbornness will probably keep Sirius XM around the $1 tightrope for now. While the company's return to profitability is commendable, it also means that Liberty Capital's
That hefty enterprise value may keep the ceiling in check, but the company's improving fundamentals will also work wonders in establishing a floor. Profitability and subscriber growth are working in Sirius XM's favor right now, and this week's falling share prices have helped to win over former skeptics.
TheStreet.com's stock model upgraded shares of Sirius XM from "sell" to "hold" yesterday. There may be some flaws in TheStreet's metrics -- it's understating the current number of fully diluted shares outstanding, and it's deceptively baking in the acquisition of XM as revenue growth -- but it's comforting to see at least one cynical source come around.
Sirius XM has come a long way. A little more than a year ago, Liberty Capital and EchoStar
Sirius XM is here to stay … even if that same verdict may also apply to its near-term share price.
Will Sirius XM spend the rest of the year above or below the $1 mark? Share your thoughts in the comments box below.