Sirius Satellite Radio (NASDAQ:SIRI) lost almost 5.5% yesterday and led the Nasdaq in volume after announcing yet more share dilution. The company will offer 73.17 million shares at $2.10 to boost the asset side of its balance sheet by $150 million.

The provider of pay-by-the-month digital entertainment cheated death a year ago by restructuring and diluting then-current investors 92%. As of Sept. 30, it had a healthy $472 million in cash and equivalents against $256 million in long-term debt. But subscriber growth isn't meeting targets and the cash burn is $300 million a year. That's why the company filed in August to raise up to $500 million through new stock offerings like the one just announced.

Most people consider debt worse than stock sales because debt requires service -- diverting cash to interest payments. Interest can be quite onerous if you don't happen to have today's low-interest rate environment. But would low-interest debt be preferable to diluting Sirius shareholders another 7.3% now and up to 25% if the company follows through? The catch for investors is that it's possible that selling stock at a paltry $2.10 a share is the company's only option -- that they can't find financing at any reasonable price. And meanwhile, management is failing to meet its own subscriber number goals.

Let's look at it this way: Your company issues debt... or its issues equity. Oprah, Uma. What's the difference?

You're a shareholder. The company floats a lot of debt and pays interest with your money. Your share of the equity is smaller because there is less of it. Or, more simply, your investment is worth less. But what if management issues stock -- and not highly valued stock, but heavily diluted cheap stock? Your share of the equity is smaller because... there are more shares sharing it.

Pick your poison, and be sure to debate investing in Sirius and its rival XM Satellite Radio (NASDAQ:XMSR) on our Sirius and XM discussion boards, and enjoy our radio show interview with XM's President and CEO, Hugh Panero!