Investors worrying about Sirius XM Radio's (Nasdaq: SIRI) 11% slide yesterday didn't have long to fret. Shares of the satellite-radio operator opened 11% higher this morning.

That's it, isn't it? The allure for bullish traders and bearish speculators boils down to lining up on either side of Sirius XM and watching it spin. It's the volatility that makes it attractive.

It has to be. This is why so many folks -- CEO Mel Karmazin included -- are rabidly against the reverse split that would seem to legitimize Sirius XM's chances with institutional investors. The consensus appears to be to maintain this stock as a trader's playground for individual investors at prices that will fluctuate above or below the $1 mark for the time being. 

Nasdaq OMX Group (Nasdaq: NDAQ) was close to delisting Sirius XM over its $1-price-per-share requirement earlier this year, but no one expected it to seriously boot one of the exchange's most actively traded stocks. Too many investors love it -- and own it. Of course, it also has its detractors, as the number of shares sold short spiked to 209.2 million by mid-May.

There's plenty of passion on both sides, but not all of it is entirely justified. In and of itself, Sirius XM shouldn't be giving fits to radical believers or fanatical naysayers. It's not some scintillating growth stock. But it's also not a death trap.

Let's explore the two extremes that seem to inform the Sirius debate on a daily basis.

Sirius XM is a growing company, but it's not exactly a speedster. Analysts see revenue growing by 12% this year, largely as the result of subscriber gains from last year's depressed levels, but also by factoring in a full year of the new fees and secondary rate changes that went into effect during 2009. On a more apples-to-apples basis, Wall Street sees revenue inching 7% higher next year.

Bears don't have a right to say "I told you so," though. The company that was on the brink of bankruptcy 15 months ago is now consistently profitable. Liberty Capital's (Nasdaq: LCAPA) investment in the company dusted off the motor, but Sirius XM is driving fine on its own these days.

In other words, despite the recent volatility, Sirius XM is a stock that lacks the fundamentals to trade substantially higher and the financial pitfalls to trade substantially lower.

Today is the company's annual shareholder meeting, and there will be plenty of speculation from the extremists.

  • Will Howard Stern sign a new contract? Whether he does or not, his decision won't be the needle-mover that some think, given Sirius XM's enterprise value, which is approaching $10 billion today.
  • Is Apple coming out with a SkyPod? In case you're wondering: No. It won't. It's fan fiction. Retail isn't satellite radio's strong suit, and Apple is app-agnostic.
  • Will Pandora kill satellite radio? Nope. If Sirius XM could swipe terrestrial radio's most lucrative audience members, it can withstand the threat from Internet radio.

So relax. If you're going to buy or short Sirius XM, the wild price swings are understood -- and are likely the biggest attraction.

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Longtime Fool contributor Rick Munarriz is a subscriber to both Sirius and XM. He owns no shares in any of the stocks in this article and is also a member of the Rule Breakers analytical team, seeking out the next great growth stock early in its defiance. The Fool has a disclosure policy.