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This Week in Sirius XM Radio

By Rick Munarriz – Feb 15, 2014 at 7:15AM

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Sirius XM Radio had a busy week of news.

Things never get dull for the country's lone satellite-radio provider. Shares of Sirius XM Radio (SIRI 0.47%) moved higher on the week, climbing 2% to close at $3.56. The media darling's move was in line with impressive as gains for the Dow, Nasdaq, and S&P 500 on the week.

There was more going on beyond the share-price gyrations, though. Sirius XM's short interest clocked in at a 52-week low, and cable TV consolidation may play a part in how Sirius XM's proposed buyout plays out.

Let's take a closer look.

Short people
There are fewer Sirius XM naysayers willing to wager real money on their pessimism. Short interest for the end of January was posted this week, and we see that just 218.9 million shares were sold short. This is the lowest short interest that Sirius XM has recorded over the past year. A year ago we had more than 400 million shorts, so the negative bets have fallen by nearly half.

The Liberty Media (FWONA) takeover proposal likely plays into that. As long as John Malone's offer remains on the table, the downside to Sirius XM is limited to Liberty Media's less volatile stock.  

Even knowing that Sirius XM was set to report fourth-quarter results a few days into February -- often a time for bulls and bears to place their speculative wagers -- wasn't enough to rally more skeptics.

Cable consolidation leaves a mark
Comcast's (CMCSA -0.31%) head-turning deal for Time Warner Cable (NYSE: TWC) is something for Sirius XM investors to keep an eye on.

This isn't about experiencing another regulatory hurdle the way that Sirius XM did several years ago when it wanted to combine two satellite radio giants. Malone had his sights set on Time Warner Cable, and as Sirius Buzz's Spencer Osborne speculates, the plan could have been to acquire Sirius XM in an all-stock deal to gain financing leverage to bankroll a play for Time Warner Cable.

As Osborne and CNBC point out, Sirius XM shares dipped on Thursday's seemingly unrelated merger news. Liberty Media moved higher. Does Malone's missing out on Time Warner Cable make a deal for Sirius XM more or less necessary? Shareholders upset at the meager premium that Liberty Media originally proposed would probably like if Liberty Media just went back to the way things were -- even if it means the return of short-sellers.

Now let's see what the new, abridged trading week brings for Sirius XM investors.

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Rick Munarriz has no position in any stocks mentioned. The Motley Fool owns shares of Liberty Media. and Sirius XM Radio. 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.

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Stocks Mentioned

Sirius XM Holdings Inc. Stock Quote
Sirius XM Holdings Inc.
$6.41 (0.47%) $0.03
Liberty Media Corporation Stock Quote
Liberty Media Corporation
Comcast Stock Quote
$35.48 (-0.31%) $0.11

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