SIRI? Wow what a rise…

Posted on September 22, 2005 , filed under Stocks | Print This Post

I’ve been following SIRI Sirius Satellite Radio, Inc. since the stock was priced below $2 a share. The stock has since risen as high as $9.43. The company has been burning cash now for months and is operating at a huge negative cash flow.

$175 Million for Howard Stern?
$300 to acquire each new customer?

This reminds me of the .com days. Sure the potential market is huge, but the amount of cash SIRI is spending is out of control. The company says it expects to be profitable by the 4th quarter of 2006 or early 2007. I say that’s a pretty big risk and aggressive time frame. It definitely rings a .com bell or two. Analysts, of course, are writing whatever they can to substantiate the stock price.

If you ask me what I think about SIRI price going up so high from $2-9, I say greed. My prediction is that the stock will drop down to around $6, maybe as low as $5 before rebounding past $10 as the company spends more cash and announces positive subscriber growth. I would short SIRI at prices past $10 if the situation happens.

*Disclaimer I shorted 2000 shares of SIRI at $7.31 per share.

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Pingback by RawGreed.com - Stock Updates, RawGreed Awards, Business Gossip » Blog Archive » Watching Sirius Satellite Radio Inc. again

2005-11-02 11:56:02

[...] I wrote an article on SIRI, Sirius Satellite Radio Inc., predicting that the stock would go down to low $6’s possibly even low $5’s before the stock would rebound past $10. [...]

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