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Sirius Finally Provides Wall Street the Clarity It Demanded

Mogambi 99, people who sell a stock short are betting the share price will go down. They must borrow the stock to sell. If the stock performs better and begins to rise in price, they will be forced to buy stock on the open market to replace what they borrowed. I do not know under what terms they borrowed so I don't know when or at what price they will feel compelled to buy back at.

SIRI has debt refinancing issues to deal with and the lending market is difficult right now. Will it get better before they need to re-fi or not? Who knows. SIRI will hurt the share price if they are forced to sell more shares because they can't get attractive financing terms. The terms they can get are affected by company performance. They are starting to demonstrate that their financials can and are getting better, even in this dreadful economy, assuming that things don't get much worse.

There is also a danger of NASDAQ de-listing as the share price is under $1.00. A reverse split is one solution and some people are quite agitated about it thinking (I believe) that it will raise the share price only to be driven down again by the shorts. I doubt this will happen (opinion). A reverse split does not affect the value of your investment but often has a negative connotation because is always pursued by companies with share prices "in the toilet", so to speak.

Diluting of the stock by the company issuing more shares does hurt share price but some think that this is inevitable and, therefore already priced in to the current stock price. Being able to sell more stock does give the company more leverage in it's upcoming debt refinancing discussions.

This is my understanding of the basic SIRI situation. I hope it helps. If I am wrong, please correct me.