This Week in Sirius XM Radio

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Things never get dull for the country's lone satellite-radio provider. Shares of Sirius XM Radio (NASDAQ: SIRI  ) moved higher this week, closing up 2.2% to hit $3.21. The general market also moved higher, and Sirius XM's hearty gain matched the Dow's 2.2% ascent.

There was more going on beyond the share-price gyrations, though. The company also revisited its four-year high of $3.25. Streaming music leader Pandora (NYSE: P  ) moved higher after posting better-than-expected quarterly results. Sirius XM announced that its CFO will speak at an investor conference. And finally, reports indicated that Apple (NASDAQ: AAPL  ) is running into some snags as it gears up to launch its own streaming service, but Google (NASDAQ: GOOGL  ) is apparently trying to double its chances at succeeding by rolling out two distinct platforms.

Let's take a closer look.

Breaking $3.25 is hard to do
Sirius XM opened at $3.25 on Wednesday and Thursday, but it couldn't nudge its way higher during the week. That's OK. There are things far worse than revisiting a four-year high.

You also have to go all the way back to March 25, 2008, to find the last time the shares traded higher. In other words, this four-year high is about to become a five-year high by the end of the month.

Trading at levels last seen 60 months ago also means that nearly all of the 406.3 million shares sold short as of mid-February are sporting losses. At a time when Sirius XM's short interest hasn't been higher, it won't take much of a catalyst to trigger a short squeeze.

Pandora rocks for a change
Shares of Pandora soared 18% on Friday after posting strong quarterly results. The music-discovery pioneer posted a narrower-than-expected loss of $0.04 a share, with revenue soaring 54% to $125.1 million.

The news gets better. After watching its monthly listeners fall from 67.1 million in December to 65.6 million in January, February's tally clocked in at 67.1 million unique listeners. That's not too shabby of a turnaround for the shortest month of the year. Pandora's revenue guidance -- calling for $120 million to $125 million for the current quarter and $600 million to $620 million for the year -- also came in ahead of Wall Street targets.

It's easy to wonder whether Pandora will really hold up this well after Sirius XM's MySXM gains traction and the titans of tech introduce their own platform, but the outlook is surprisingly robust -- for now.

Nothing to Frear but Frear itself
Longtime Sirius XM CFO David Frear has spent years presenting the bullish argument for satellite radio, and now he'll get to do it again. Frear will be a presenter on Tuesday at next week's Piper Jaffray Technology, Media, and Telecommunications Conference. He isn't likely to say anything that may move the stock one way or the other, but investors should still check out the webcast of the event.

Apple and Google pump up the volume
The chatter surrounding Apple's inevitable entry into music streaming has been growing in recent months, and this week brought a few interesting nuggets.

Beats Electronics, the music tech company co-founded by Dr. Dre and label exec Jimmy Iovine, and best known for its high-end headphones, went public with plans to introduce a music-streaming service earlier this year. Several sources tell Reuters that Apple has had talks with Beats to form a partnership surrounding the service.

However, a New York Post article came out later in the week suggesting that Apple's plans are starting to fall apart as it asks labels to accept just $0.06 a share in music license royalties for every 100 songs streamed. That would be half as much as Pandora is currently paying.

If Apple is trying to lowball the record labels, does that mean it plans to introduce a free ad-supported service? This would make things interesting, as the likely path seemed to be a premium service that would make Sirius XM's value proposition for existing receiver-based subscribers more compelling.

Then we have Google as it readies what appears to be two distinct music streaming services. One will go through its nascent Google Play platform and the other through YouTube. Firm details have yet to surface on what will differentiate the two offerings, but Google is probably relishing the chance to beat Apple to this digital niche that's starting to get pretty crowded.

Things continue to heat up in digital music these days, and perhaps that's why Sirius XM has been investing time and money in this area.

Turning the dial
Even though Sirius XM is one of the market's biggest winners since bottoming out three years ago, there is still some healthy upside to be had if things go right for it -- and plenty of room for it to fall if things don't. Read all about Sirius in our brand-new premium report. To get started, just click here now.

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9/30/2016 4:00 PM
SIRI $4.17 Up +0.03 +0.60%
Sirius XM Radio CAPS Rating: **
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Apple CAPS Rating: ****
GOOGL $804.06 Up +1.42 +0.18%
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P $14.33 Up +0.19 +1.34%
Pandora Media CAPS Rating: **