I'm not the only one who's recently turned positive on Sirius XM Radio (NASDAQ:SIRI). Shares of the satellite-radio provider traded as much as 43% higher this morning, after WSJ.com reported that EchoStar (NASDAQ:SATS) has been buying gobs of the company's debt.

According to the relentlessly chatty "people familiar with the matter," EchoStar has been buying up chunks of the $174.6 million in debt Sirius is due to repay later this month. Since EchoStar has never fancied itself a gambler, one can assume that the company isn't just looking for a near-term trade here.

So let me ask the question on every speculator's mind this morning: What are you doing here, EchoStar?

A history of space
EchoStar is no stranger to beaming entertainment to subscribers via satellite. The company spun off DISH Network (NASDAQ:DISH), the United States' No. 2 satellite TV provider after DirecTV (NYSE:DTV), last year. Is it cozying up to Sirius to fill the void DISH left behind?

Investors need to be careful here. Until it makes its intentions clear, EchoStar can't be greeted as a liberator. What if it's just gobbling up debt to force the company into bankruptcy, should Sirius prove unable to line up refinancing elsewhere? As a major creditor, EchoStar would have some serious weight in bankruptcy. It might walk away from the rubble with Sirius XM in tow, but common shareholders would likely get hosed.

Things will get interesting if EchoStar buys up debt beyond this month's maturities. $200 million of the $350 million due in May rests in the hands of JPMorgan Chase (NYSE:JPM) and UBS AG (NYSE:UBS). As gun-shy banks, they would probably prefer to negotiate with Sirius rather than write down the credit. EchoStar may be their ticket out of that iffy debt.

In cinematic terms, what if EchoStar is There Will Be Blood's Daniel Plainview, buying up tracts of adjacent land to drink Sirius XM's proverbial milkshake?

There WILL be blood
Longs don't like uncertainty, but another group despises it even more: shorts.

There were nearly 220 million shares of Sirius sold short as of mid-January. How many of those investors can afford to take a hit if EchoStar is planning a shareholder-friendly buyout?

If you listen between the gaps of today's frenzied trading in Sirius XM shares, you can actually hear the short squeeze. The bears may be right. Sirius XM may have no choice but to file for bankruptcy later this year. However, now that there's a whiff of at least one potential suitor in the air, do you think the longs who have suffered for so long will just give away their Sirius shares?

On the block
EchoStar can't be the only company with Sirius XM on the brain. If satellite radio is good enough for the DISH family tree, surely it's good enough for the larger DirecTV, right? And while Clear Channel is unlikely to gather the private equity funds necessary to make a play for Sirius, wouldn't terrestrial radio's mortal enemy look interesting on the arm of traditional radio's leader?

While we're talking terrestrial radio, CBS (NYSE:CBS) is another company that could do some serious damage in the media space with Sirius XM in its arsenal. With shares of CBS fetching little more than a foot-long Subway sandwich these days, what does the Eye Network have to lose?

In short, even though we still don't know EchoStar's intentions, it's probably not the only company that would make sense as a potential suitor. After months of steady declines, I'm glad to see Sirius XM feeling wanted again.

More news than static on Sirius XM: