Barclay Capital analyst James Ratcliffe did what so many other investors have done lately when it comes to Sirius XM Radio (NASDAQ:SIRI): He walked away.

Ratcliffe discontinued coverage of the satellite radio giant yesterday.

"We believe that the equity price is not being driven by fundamentals or the future of the underlying business, but rather purely by speculation as to the company's ability to refinance or restructure upcoming debt maturities," Ratcliffe explains, as recounted by BusinessWeek's "The Tech Beat".

In other words, Sirius has become a crapshoot. It's a lottery ticket, hinging almost entirely on CEO Mel Karmazin's ability to refinance the company's debt before the nearly $1 billion that is due this year forces the company into bankruptcy reorganization.

He's right, but doesn't that make this the best time to be covering the company. Sirius may be a stock in casino wrapping, but it simply raises the stakes for those who can have a better handle on Karmazin's ability to keep the satellite radio provider solvent.

At a recent price of $0.11, it's easy to dismiss Sirius. However, it remains one of the most actively traded stocks. As a result of its bloated shares outstanding count since its merger with XM, Sirius commands a market cap of nearly $400 million.

It doesn't end there, though.

If you want to make some easy money with your financially dim buddies, bet them that they can't guess what the price of Sirius would be if the market's perceived value of the company would double.

The correct answer isn't $0.22, based on its $0.11 starting point. It's actually closer to a buck, when you factor in the company's debt load to arrive at an enterprise value of roughly $3.4 billion. If its enterprise value would double to nearly $7 billion, that's where the stock price -- and market cap -- would have to be.

The leveraged upside doesn't take away from the grim possibility of a bankruptcy wiping out common-stock shareholders. In music -- and digital music in particular -- Sirius must compete against cash-blessed companies like Apple (NASDAQ:AAPL) and RealNetworks (NASDAQ:RNWK). Other digital heavies such as (NASDAQ:AMZN), Time Warner (NYSE:TWX), Best Buy's (NYSE:BBY) Napster, and CBS (NYSE:CBS) have the means to ramp up spending if this ultimately becomes an arms race.

However, the feast-or-famine mind-set doesn't justify walking away from Sirius as an investment. One less celebrated analyst tracking the company will leave the ultimate lessons in this hit-or-miss case study unheard and unheeded.

More news than static on Sirius XM:

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.