The Reason Behind Sirius XM's Recent Stock Rise

Includes: QQQ, SIRI
by: Satwaves

Behind every great man is a great woman, and behind every technical rise is a fundamental reason for a stock to have done so. Technicals tell us whether a greater majority are buying or selling a given stock at any given time. They do not tell us "why." We are bearing witness to a sustained rise in Sirius XM (NASDAQ:SIRI) shares, yet until today the underlying reason(s) for the move have only been speculated upon.

Some feel the recent revelation of market abuses has halted manipulation in the stock, allowing it to trade as it should have done all along. Nope...that's not it. Neither is the reason related to bullish comments by Sirius XM CEO, Mel Karmazin; nor is it speculation on the future of Howard Stern: nor is it being placed on positive credit watch by Standard & Poor's. The talking heads at CNBC, despite two reports on Sirius XM missed the reason (not that they wanted to find it), and it hasn't been published anywhere. Correction, I first mentioned the reason several months ago, but it has not become a factor -- until now.

The answer lies in Sirius XM's $5 Billion market cap. At this level, Sirius XM will be added to the Nasdaq 100 index in December. So what does December have to do with October? Everything. The list that the Nasdaq will reveal in December, is determined by "end of October Nasdaq market data." Now call me psychic, but I know what you are thinking. The inclusion in the Russell indexes was supposed to be a major catalyst for SIRI shares, and that fell short. I'm right, aren't I? Go can say it...I already know.

Besides the obvious point of the NASDAQ 100 being 1000% more important than the Russell, inclusion of Sirius XM into the Russell portfolio also meant inclusion in the Russell Ultrashort portfolio. The timing of the last event coincided with a period in the market in which the bears had control, and the market was in fear of a double dip recession. Although to some extent those fears still exist, the threat of quantitative easing (QE2) by the Fed is keeping shorts at arms length.

In a few weeks, the SEC's new modified uptick rule will also be put into place. Sirius XM will be added to the QQQQ's after this takes effect, making comparisons to the Russell inclusion an excercise in futility, as it's comparing apples to pine cones. I know it's oranges, but both apples and oranges are food, and there are simply no similarities between inclusion in the Russell Indexes and Nasdaq 100. Except for one perhaps; with the inclusion into the Russell came greater analyst attention. Get ready for more analysts to begin coverage on Sirius XM based on the "Q's" inclusion.

Here's a list of the NASDAQ 100. Companies highlighted in bold type have market caps lower than Sirius XM:

Company Name Symbol

  1. Activision Blizzard, Inc (NASDAQ:ATVI)
  2. Adobe Systems Incorporated (NASDAQ:ADBE)
  3. Altera Corporation (NASDAQ:ALTR)
  4., Inc. (NASDAQ:AMZN)
  5. Amgen Inc. (NASDAQ:AMGN)
  6. Apollo Group, Inc. (NASDAQ:APOL)
  7. Apple Inc. (NASDAQ:AAPL)
  8. Applied Materials, Inc. (NASDAQ:AMAT)
  9. Autodesk, Inc. (NASDAQ:ADSK)
  10. Automatic Data Processing, Inc. (NASDAQ:ADP)
  11. Baidu, Inc. (NASDAQ:BIDU)
  12. Bed Bath & Beyond Inc. (NASDAQ:BBBY)
  13. Biogen Idec Inc (NASDAQ:BIIB)
  14. BMC Software, Inc. (NASDAQ:BMC)
  15. Broadcom Corporation (BRCM)
  16. C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW)
  17. CA Inc. (NASDAQ:CA)
  18. Celgene Corporation (NASDAQ:CELG)
  19. Cephalon, Inc. (NASDAQ:CEPH)
  20. Cerner Corporation (NASDAQ:CERN)
  21. Check Point Software Technologies Ltd. CHKP
  22. Cintas Corporation CTAS
  23. Cisco Systems, Inc. CSCO
  24. Citrix Systems, Inc. CTXS
  25. Cognizant Technology Solutions Corporation CTSH
  26. Comcast Corporation CMCSA
  27. Costco Wholesale Corporation COST
  28. Dell Inc. DELL
  29. DENTSPLY International Inc. XRAY
  31. DISH Network Corporation DISH
  32. eBay Inc. EBAY
  33. Electronic Arts Inc. ERTS
  34. Expedia, Inc. EXPE
  35. Expeditors International of Washington, Inc. EXPD
  36. Express Scripts, Inc. ESRX
  37. Fastenal Company FAST
  38. First Solar, Inc. FSLR
  39. Fiserv, Inc. FISV
  40. Flextronics International Ltd. FLEX
  41. FLIR Systems, Inc. FLIR
  42. Foster Wheeler AG. FWLT
  43. Garmin Ltd. GRMN
  44. Genzyme Corporation GENZ
  45. Gilead Sciences, Inc. GILD
  46. Google Inc. GOOG
  47. Henry Schein, Inc. HSIC
  48. Hologic, Inc. HOLX
  49. Illumina, Inc. ILMN
  50. Infosys Technologies Limited INFY
  51. Intel Corporation INTC
  52. Intuit Inc. INTU
  53. Intuitive Surgical, Inc. ISRG
  54. J.B. Hunt Transport Services, Inc. JBHT
  55. Joy Global Inc. JOYG
  56. KLA-Tencor Corporation KLAC
  57. Lam Research Corporation LRCX
  58. Liberty Media Corporation LINTA
  59. Life Technologies Corporation LIFE
  60. Linear Technology Corporation LLTC
  61. Logitech International S.A. LOGI
  62. Marvell Technology Group, Ltd. MRVL
  63. Mattel, Inc. MAT
  64. Maxim Integrated Products, Inc. MXIM
  65. Microchip Technology Incorporated MCHP
  66. Microsoft Corporation MSFT
  67. Millicom International Cellular S.A. MICC
  68. Mylan Inc. MYL
  69. NetApp, Inc. NTAP
  70. News Corporation NWSA
  71. NII Holdings, Inc. NIHD
  72. NVIDIA Corporation NVDA
  73. O'Reilly Automotive, Inc. ORLY
  74. Oracle Corporation ORCL
  75. PACCAR Inc. PCAR
  76. Patterson Companies Inc. PDCO
  77. Paychex, Inc. PAYX
  78. Incorporated PCLN
  79. Qiagen N.V. QGEN
  80. QUALCOMM Incorporated QCOM
  81. Research in Motion Limited RIMM
  82. Ross Stores, Inc. ROST
  83. SanDisk Corporation SNDK
  84. Seagate Technology. STX
  85. Sears Holdings Corporation SHLD
  86. Sigma-Aldrich Corporation SIAL
  87. Staples, Inc. SPLS
  88. Starbucks Corporation SBUX
  89. Stericycle, Inc. SRCL
  90. Symantec Corporation SYMC
  91. Teva Pharmaceutical Industries Limited TEVA
  92. Urban Outfitters, Inc. URBN
  93. VeriSign, Inc. VRSN
  94. Vertex Pharmaceuticals Incorporated VRTX
  95. Virgin Media Inc. VMED
  96. Vodafone Group Plc VOD
  97. Warner Chilcott plc WCRX
  98. Wynn Resorts, Limited WYNN
  99. Xilinx, Inc. XLNX
  100. Yahoo! Inc. YHOO

Disclosure: Long SIRI