Why so nervous, Sirius XM Radio (Nasdaq: SIRI) investors?

The satellite radio provider reports second-quarter results tomorrow, and it's easy to see why cautious optimism is in short supply. The shares have stumbled badly after each of its previous quarterly conference calls, despite posting solid results.

Back in May, shares of Sirius XM tumbled 4% the day it delivered healthy first-quarter financials. Four trading days after its report, the satellite radio giant's stock had shed 18% of its value.

Things weren't any better three months earlier, when Sirius XM's stock took a 5% hit after its fourth-quarter call, plunging 17% over the course of two trading days.

Will it be different this time? I think so. Let me count the reasons why.

1. You can't sell on the news when you didn't buy on the rumor
An important factor behind the stock's smacks was that there was some serious buying leading up to the reports. Shares of Sirius XM climbed 15% between the fourth and first quarters -- and a scintillating 75% between the third and fourth quarters before that.

There hasn't been any kind of buildup this time around. The stock is actually trading below the $1.23 it closed at before announcing its previous report.

Sirius XM announced inspiring subscriber gains before the actual results were posted in each of the three periods. They may have been baked in previously, but the oven has simply been preheating this time around.

2. The bear's cave is getting crowded
There were 217.3 million shares of Sirius XM sold short as of mid-July by investors betting on the stock price decreasing. That's far more than twice the bearish wagers placed heading into its fourth-quarter report six months ago.

This is huge. Some may argue that any growing collective of pessimists is a reason for concern, but to me it always smells like a potential short squeeze. Even a moderately favorable report should be enough to trigger a wave of short covering, driving the stock higher as the shorts zero out their positions.

3. The prospects continue to get brighter
Sirius XM has tacked on 1.1 million net subscribers over the past year. Churn and conversion rates are improving. Auto sales have been buoyant. There aren't a lot of trends grinding against Sirius XM's goals, as the media titan continues to revise its outlook higher with every passing quarter.

Potential disruption has been silenced recently. Pandora has grown to 60 million registered users, but that is mostly a PC and Wi-Fi phenomenon. Now that AT&T (NYSE: T) -- and inevitably Verizon (NYSE: VZ) -- are leading the way in metering data on smartphones, drivers may think twice before streaming the presumably "free" music-discovery service on their ticking data plans.

HD Radio? It's been nearly three years since Ford (NYSE: F) became the first automaker to make HD Digital Radio available on multiple product lines. Where art thou, buzz? HD Radio does open up the programming choices, but this is still ultimately terrestrial radio that needs to be monetized through advertising.

Where are the other bugaboos hiding?

Liberty Capital (Nasdaq: LCAPA) isn't going to convert its 40% preferred share stake or bail on Sirius XM, even as John Malone shuffles around his holdings.

Howard Stern may be channeling Brett Favre as he ponders his future plans, but his choices essentially boil down to retiring or re-upping with Sirius. Terrestrial heavies Clear Channel and CBS (NYSE: CBS) can't pay what Sirius can dish out. Going solo through a premium Web-based channel has hit a roadblock now that AT&T is killing unlimited data plans for new buyers of Apple's (Nasdaq: AAPL) iPhone 4.

A Stern retirement party wouldn't derail Sirius XM, because subscribers aren't likely to dump the service and go back to terrestrial radio. The move would also free up Sirius XM's programming budget to snag some more polarizing stars from the AM and FM dials.

Auto sales will face tough comparisons in the latter half of the year, but as long as cars keep selling, the self-pay customers will follow after their free trials run out.

Sirius XM is in far better shape than its stock price suggests. The ingredients are in place for a respectable reaction tomorrow.

Stop gnawing on those fingernails, bulls. You're almost at the bone.

What are you expecting out of tomorrow's report? Share your thoughts in the comments box below.

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Longtime Fool contributor Rick Munarriz is a subscriber to both Sirius and XM. He does not own shares in any of the companies in this story. He 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.