Image source: Sirius XM.

The naysayers continue to stack up against Sirius XM Radio (NASDAQ:SIRI). Two weeks ago I wrote about the possibility of a short squeeze, as short interest on the satellite radio provider was clocking in at 159.2 million. That was the highest number of bearish wagers placed against Sirius XM stock since last summer.

The skepticism has only intensified since then. Short interest has ballooned up to 165.8 million as of mid-March, Sirius XM's highest level of negative activity in more than a year.

Sirius XM stock is trading 6% lower so far in 2016, but it isn't trading far from the multi-year high of $4.20 it hit in November. It's easy to see why the media giant's prospects are so bright. It's been gaining subscribers sequentially for more than five years, closing out 2015 with 29.6 million subscribers. 

Growth is slowing, something that is natural at this stage of satellite radio's adoption cycle. However, Sirius XM is still finding ways to grow its business. It's making a push into logistics. It's working with used car dealers to incentivize activations on secondhand sales. It's pushing through modest rate increases, and -- more importantly -- customers are paying them. Monthly churn is holding steady, and Sirius XM seems to be bumping at least some parts of its guidance higher with every passing quarter.

All of this would seem to make Sirius XM a tricky stock to bet against. It's consistently profitable, and this is a scalable model. If revenue moves higher, adjusted EBITDA and earnings are typically coming through with larger gains.

All of this would seem to suggest that shorts aren't going to get the stock crash that they're holding out for, and here's where things can get hairy. With short interest at a 52-week high we may be a positive catalyst away from sending them scurrying for the exits. With 165.8 million shares sold short it could be a pretty fierce short squeeze. 

We'll know more about the state of market pessimism early next week when the exchanges disseminate shorting data as of the end of March. It's hard to fathom what bears see in a stock that has been a market beater in recent years with improving fundamentals to justify the upticks. With Sirius XM buying back $6.5 billion of its stock over the past three years it's also safe to say that it's doing its part to trigger a short squeeze. Sirius XM will need to unearth the catalyst to put things into action, but when it does occur

all of the ingredients are in place to make the short squeeze happen.