Things never get dull for the country's lone satellite-radio provider. Shares of Sirius XM Radio (NASDAQ:SIRI) moved sharply lower this past week, sliding nearly 5% to close at $3.53. The media darling's slide was far worse than the Nasdaq's 1.5% dip on the week.
There was more going on beyond the share-price gyrations, though. Short interest on Sirius XM inched higher. There was also a compelling bullish argument put out by Fool senior analyst Michael Olsen, explaining why he is buying the stock. And on the streaming front, Spotify made its free offering more compelling -- and that's bad news for Pandora (NYSE:P) and, to a lesser extent, Apple (NASDAQ:AAPL).
Let's take a closer look.
There was a spike in short interest on Sirius XM Radio. The media giant closed out November with 302.9 million shares sold short, a healthy increase from the 271.7 million shares that were betting against Sirius XM just two weeks earlier.
Sometimes you see big moves in a stock between the naysayer swings. However, Sirius XM stock essentially went from $3.74 in mid-November to $3.77 on the final trading day of the month. The recent weakness began in December.
This isn't alarming. Sirius XM's short interest peaked at the end of February, when more than 414 million shares were sold short. This is a trend we'll keep watching, but it's nothing to worry about. There are way too many examples of stocks that move higher after spikes in short interest.
There's a real opportunity on the "freemium" end of mobile streaming, and Spotify wants a bigger piece of the action.
After seeing Apple's successful rollout of iTunes Radio three months ago -- drawing in more than 20 million listeners and cranking out more than a billion tunes in its first month of availability -- Spotify needed some more skin in the smartphone game for music fans who aren't interested in paying for a subscription. After all, if Pandora was able to serve a record 1.49 billion hours of audio content last month despite Apple's arrival, clearly there's room for another disruptor.
Spotify announced on Wednesday that while it will continue to charge $10 a month for smartphone owners wanting online and offline access to the exact tunes they want to hear, it will roll out a free ad-based service that will shuffle through songs by an artist or in an album or playlist. That's not as great as Spotify's flagship premium service, but it will probably compete against Pandora's discovery service that doesn't allow that level of explicit customization.
The streaming market just keeps heating up.
Longtime Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Apple and Pandora Media and owns shares of Apple and Sirius XM Radio. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.