Right now, there are investors out there thinking: "Sure, Sirius is risky. But hey, it only costs $7. I'll buy 100 shares and hope for the best. After all, with a price that cheap, what's the worst that can happen?
Answer: The same thing that can happen if you invest $700 in a company whose shares sell for $50 a pop. They could go up. They could go down. Or they could go really down, to zero.
In 1965, consumer advocate Ralph Nader wrote a book skewering the U.S. auto industry in general, and GM's
Sirius Satellite
And what will the company be worth when that happens? Also zero.
All it takes to cripple Sirius is for one satellite to break down. If two satellites break down, the company dies, taking your investment with it. If Sirius' management isn't going to -- or can't afford to -- insure the interests of its shareholders, you can't afford to own Sirius. At any price.
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Fool contributor Rich Smith owns no shares in any company mentioned in this article. The Fool has a disclosure policy.