Why Does Everybody Hate Sirius XM?

For a company that seems to be doing everything right, Sirius XM Radio (NASDAQ: SIRI  ) sure has a funny way of attracting naysayers.

A whopping 401.6 million shares of the satellite radio provider were sold short as of the end of last month. The exchanges update the number of existing short positions at the midpoint and end of every month for every stock, and this is the largest number of bearish bets that have been placed on Sirius XM over the past 12 months.

What attracted the pessimists ahead of its holiday-quarter report? Shorts may have thought that Sirius XM was due for a breather after four straight years of market-thumping capital gains. With Liberty Media (NASDAQ: LMCA  ) completing its quest to gain majority control of Sirius XM last month, perhaps the worrywarts figured that the party was over.

Wouldn't Sirius XM face some heavy selling pressure if Liberty Media decided to spin off its stake to investors in a tax-advantaged transaction? No. It can certainly happen, but that's also why Sirius XM has earmarked $2 billion in buybacks. If there's a deluge of selling, Sirius XM can counter with a massive repurchase.

Besides, have you been seeing Starz (NASDAQ: STRZA  ) lately? The premium movie platform opened at $14.15 when Liberty Media broke it off as a stand-alone company last month. Starz's share price is now old enough to vote, in the high teens.

There is no reason to believe that a spinoff of Sirius XM would be as successful, but we're merely aiming to debunk the myth that spinning off the satellite radio provider would trigger a sell-off.

Sure, now that Liberty Media has gone from 40% to 50% ownership of Sirius XM over the past year, it may be harder to drum up buying support here. However, Sirius XM's guidance calls for another year of double-digit growth in 2013. Since the company's outlooks have proven conservative in the past, it seems dangerous to be holding on to a Sirius XM short for too long.

Sirius XM may have to deliver a chunky piece of good news to trigger a short squeeze and bring naysayer levels down to more historic levels, but until then, the healthy skeptics count is a good thing.

Sirius business
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Read/Post Comments (11) | Recommend This Article (2)

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  • Report this Comment On February 13, 2013, at 1:55 PM, bestwaytoriches wrote:

    Rick,

    You've lost it. The only thing reader hate is the lies Motly Fool writers put out. There should be a disclaimer telling if your being payed to write this.

    I own SIRI it's a great service I use each day and it's going much higher. Another great play is RAD my broker brought this one to me. Professional money managers and smart analyst prediction for 2013 RAD to triple with a price target of $ 3.20. So Rick were do you sit?

  • Report this Comment On February 13, 2013, at 1:56 PM, bestwaytoriches wrote:

    Rick,

    You've lost it. The only thing reader hate is the lies Motly Fool writers put out. There should be a disclaimer telling if your being payed to write this.

    I own SIRI it's a great service I use each day and it's going much higher. Another great play is RAD my broker brought this one to me. Professional money managers and smart analyst prediction for 2013 RAD to triple with a price target of $ 3.20. So Rick were do you sit?

  • Report this Comment On February 13, 2013, at 4:23 PM, m55555 wrote:

    Rick

    Come on now,the fool has always had ah problem,with siri,you bad mouth this stock to death,and I don't even get me started as far your writers are concered,you where trying to sink it at 10 cents,you should change jobs as far as I'm concerned,coming from the music business 48 yrs,I fined your rag sheet as bad as fri. morning quarterback,sheeeeezzzzzzzzz get a new life dude.

  • Report this Comment On February 13, 2013, at 6:16 PM, southernbeachguy wrote:

    Actually Rick was recommending Sirus for the past few years when the others at The Fool were degrading it.

    Rick.... One explanation for why there are so many shorts--- there are a lot of Dumb people in this world... they short Siri.

  • Report this Comment On February 13, 2013, at 6:18 PM, johneros wrote:

    If you've ever dealt with Sirius directly, you may find a reason to hate them. They appear to me to be one of the world's worst companies for customer service. Billing is always wrong and if you get someone on the phone they really can't help you. Overseas call center that is unable to transfer a call stateside, so we're told. Extremely difficult to do anything with and seemingly do not care. If you at all care about fundamentals of a stock, you should consider how they actually do business. Based on my experiences with them as a customer, I would short them, too.

  • Report this Comment On February 13, 2013, at 7:29 PM, Austin77478 wrote:

    johneros

    "Based on my experiences with them as a customer, I would short them, too."

    Okay! Put your money where your mouth is. Talk is cheap!!!

  • Report this Comment On February 13, 2013, at 9:50 PM, bottomfisherman wrote:

    Everyone does not hate SIRI, just the Motley Fool does, they have been wrong this entire run. They could have jumped in at any time but they continue here with the bashing. Get over it, move on or get on board.

  • Report this Comment On February 14, 2013, at 11:02 AM, BobLoblaw192 wrote:

    If you go to their Facebook page, you will see hundreds of disgruntled comments from the past week because Sirius has decided to charge more money for internet listening. The customer experience during this transition is awful, and demonstrates that the leadership isn't quite in touch with the clients.

  • Report this Comment On February 23, 2014, at 5:30 PM, WMichella wrote:

    I am 45. I like Disco, Rock, Country, R&B etc. from the 70s, 80s, 90s and very little newer music. I do not appreciate any DJ mixing or rerecorded mixes of the music that I grew up with. As soon as they change the music to the way XM had it, I will be glad to purchase a subscription. For now I will try and get music that I want to hear on my Micro SDs as soon as I have time from work and the energy to do it. I wont be wasting money on a satellite radio company that does not seem to care about all customers, not just a majority.

  • Report this Comment On June 13, 2014, at 9:47 AM, GetWithIt wrote:

    I have given Sirius 2 years to get their act together. Last year I reduced my subscription to save money and they never refunded me until I called months later. Ok. This year they upgraded my subscription (I did not request an upgrade) and overcharged me. I spend HOURS trying to get the overseas "customer service" to understand the situation. I got a confirmation email showing I'd get the refund. Guess what? My credit card never got the credit... so I cancelled. The US person offered me a free month, a discounted 3 month package. Who are they kidding? They deserve to go under and there is NO EXCUSE for this AWFUL service. Do not stand for it! Make a stand and QUIT SIRIUS TODAY!

  • Report this Comment On June 20, 2014, at 1:31 PM, ABQLilly wrote:

    Rick,

    I dislike SIRIUS and would never invest!

    While the stocks may good for now, a company's long term life is partly based on reputation. Company reputation (in my mind) includes product quality, price, ease of use and customer service.

    Sirius XM has lost their mind when it comes to customer service and they use their size as power against customers. As a mature consumer, I know my rights and where copies of my letters should go, such as the Attorney General, the FCC, and my Senator.

    Sirius XM works overtime to obtain initial consent. I received anywhere between 3 and 6 phone calls per day, morning, noon, and night when Sirius XM wanted me to rejoin.

    They claim all their information is in "the contract." As a customer, I never received a copy of this contract and when I noticed an automatic renewal on my credit card and complained, it turned into a fiasco.

    I rarely complain about a company however, this company received triple duty from me. I sent complaint letters to all of the organizations listed above and have posted numerous complaints on the Internet and Facebook.

    Learning about a companies customer service should definitely be part of the Motley Fool's investment decision making.

    This company is going to end up in litigation and lose everything.

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