How well did Sirius XM Radio (Nasdaq: SIRI) CEO Mel Karmazin fare at yesterday's Bank of America Media, Communications & Entertainment Conference? The stock popped 5% higher yesterday.

Next question.

Sure, Karmazin didn't lay to rest concerns about where Howard Stern would be when his five-year deal runs out. Then again, it was probably better that way.

Selling Sirius XM's potential -- with or without Stern -- is what will ultimately drive the stock. Let's go over a few of the meaty points brought up during yesterday's presentation.

Sirius XM is a big subscriber service
Closing in on 20 million accounts, Sirius XM is the country's second largest media subscription service. Only Comcast (Nasdaq: CMCSA) draws a bigger crowd.

There are economies of scale to be realized, and Sirius XM is going to get there. The triple threat of widening penetration in the auto market, higher conversion rates after new car buyers consume their free satrad trials, and diminishing churn rates can't be ignored.

Even if auto sales begin to slump -- and Ford's (NYSE: F) 10.6% year-over-year slip last month was actually kind pitted against meatier slides at GM and Honda (NYSE: HMC) -- fundamental improvements elsewhere will keep the subscriber count climbing.

Turning lemons into lemonade
Sirius and XM have lost a lot of money over the years -- and that isn't necessarily a bad thing. EchoStar's (Nasdaq: SATS) Charles Ergen and Liberty Capital's (Nasdaq: LCAPA) John Malone may have approached Sirius XM in its hour of need last year given their common interests in satellite-based subscription services, but the beefy accumulated deficit didn't hurt.

Sirius XM has $8 billion in tax-loss carryforwards. In other words, the company isn't going to be dishing out corporate taxes, for the most part, for a long time. It can use earlier losses to offset taxable gains in the future, and that actually means something now that Sirius XM has rattled off four consecutive breakeven quarters.

There is real value here, since we're talking about roughly $3 billion in tax obligations that can be ideally skirted given current rates. Naturally the value grows if tax rates inch higher.

Get pumped over Sirius XM 2.0
There aren't a lot of details about the serious platform upgrade that will kick in on new satellite receivers that will hit the market before next year's holiday season. All that the market has been told is that subscribers will be able to access more content and take advantage of broader functionality.

Obviously this could be a real game changer, especially if it can widen its programming without having to compress the audio quality of its existing content. If the functionality features apply outside of the automobile, it may also drive the perceived value of the medium.

One of the givens is that the new receivers will be more interactive, making it easier for listeners to do things like show interest in a sponsored spot or do more than just tag songs that can be later downloaded through Apple's (Nasdaq: AAPL) iTunes. In short, the Sirius XM 2.0 will make the platform more attractive to advertisers, as it opens up new revenue streams.

Stability in satrad
It took some masterful juggling and a brutally dilutive loan from Liberty Capital, but Sirius XM finally has the time it needs. There are no significant debt maturities until 2013, and the near-term financials are encouraging.

Sirius XM didn't raise its guidance during its presentation yesterday, but simply sticking to last month's outlook is fine. The media giant expects to close out the year with $2.8 billion in revenue, generating $575 million in adjusted EBITDA.

Despite the volatile past and last year's near collapse, Sirius XM is the real deal these days.

Do you think Sirius XM will close lower or higher between now and the end of the year? Share your thoughts in the comment 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 stocks in this article. 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.