beat-downI have been avoiding the task of writing anything regarding Sirius XM of late. The truth is the last several articles I wrote were met with a slew of negative responses and personal attacks. My position was and and remains for the recently approved reverse split as well as a share offering to precede what I perceive as the inevitable reverse split.

Now that Sirius XM shareholders have approved the boards recommendations, and filings have been made with the SEC, I thought I might persuade a few of my critics to see things as I do.

For starters, SIRI is a 12 cent stock. I agree that it should not be. but the simple truth remains...12 CENTS! In my opinion, the reason that it is a 12 cent stock is that far too many shares are outstanding and that makes manipulation all too easy. Most people look at the managements convert offering following the merger as the culprit, which I attribute to Jim Cramer and his "bond bully" scenario.

Although I believe he was partially correct, the new outstanding share balance following the merger of Sirius and XM is more likely the culprit. With a ton of debt, it was far too easy to bet against Satellite Radio's future, whether shares were available to short or not. Just look at how quickly the stock went down following the merger and the creation of a monopoly. Most would agree that it made little sense.

As for the thought of bankruptcy that these shorts have bet the farm on, it will not happen. Sirius XM listeners tend to be SIRI investors. Bankruptcy would all but put Sirius XM out of business permanently. If you thought the cries that followed the channel consolidation were loud, imagine the bang that would follow a bankruptcy announcement. In my opinion, it is not even a remote possibility.

Investors have been screaming for management to take action against not only the suppressed stock price but the manipulators as well. With the company's new plan seemingly written in stone, it appears to me that Sirius XM management is doing just that. By raising the price it achieves 2 goals. One of which is to avoid any future delisting possibilities, and the other to allow institutions that cannot buy Sirius XM for their portfolios to do just that.

The inevitable reverse split reduces the outstanding number of shares which means not only less shares available to short but also less shares available to purchase, resulting in a rising stock price.

The pain of this has already been realized, and its time to begin looking ahead to the future of SIRI, which may have never since its creation looked better from an investment standpoint.

Position:  Long Sirius XM