Bears continue to shuffle toward the exit turnstiles at Sirius XM Radio (SIRI).

Fresh exchange data this week shows that there were 368.8 million shares of the satellite radio provider sold short at the end of May. Since peaking at just above 414 million at the end of February, shorting activity at Sirius XM has fallen in five of the six bi-monthly reporting periods.

It's easy to see why the naysayers have gotten cold feet. The stock climbed 12% in those three months as Sirius XM posted encouraging growth, Liberty Media (FWONA) didn't move to spin off its majority stake in a way that would dramatically inflate the float, and the competitive climate was peaceful.

Having said all of that, don't be surprised if the mid-June short data shows an increase later this month.

Liberty Media doesn't appear to be in a hurry to move its majority stake in Sirius XM, but the stock has taken a 6% hit this month through yesterday's close as the market assesses the challenge of Apple (AAPL -0.35%) entering the streaming market.

Sirius XM shares fell sharply during the final two hours of trading on Monday, which not so coincidentally was when Apple unveiled iTunes Radio and talked up iOS integration in cars.

Investors have known that Apple was coming in with a streaming product beyond its ho-hum iTunes Match for some time, but it was still a surprise to see Apple so aggressive in making it available as a free ad-based product. This dovetails into Apple's push to have at least five automakers incorporate iOS into its dashboard technology, making it that much easier for drivers with smartphones to stream iTunes Radio.

Sirius XM has premium and proprietary content that will serve it well, but the fear here is that Apple's threat will woo some casual Sirius XM subscribers and keep Sirius XM rate increases in check.

The sluggish share price and Apple's aggressive push may just enough to increase the doubts that short sellers feast on as potential catalysts for a drop.

Longs don't need to fear the shorts. History has been kind to Sirius XM when the shorts pile up. February's peak in shorting interest resulted in double-digit gains for longs three months later. We'll see how things play out this time.