Sirius XM Radio's short interest has risen for the fifth consecutive period to an one year high of 209,163,980 shares. The data, released today for the period between April 30th and May 14th represents a 33% increase over the previously reported numbers.
While 209 million shares short is a large number, it would only take about two trading days to cover the position. The interesting fact is that this steep rise in short interest comes at a time when Sirius XM is trying to qualify for the Russell Re-Balance by staying over $1.00 at the close this Friday. Should Sirius XM qualify and gain inclusion into the Russell Indexes, buying pressure would be created.
It appears that there is a large faction in the market that is betting Sirius XM wont make it. At this point it is a tough call. Three trading days remain with the Sirius XM Annual meeting happening right in the middle. If the company were to make a major announcement at the shareholder meeting, it could be enough to bolster the equity and give the shorts a cause for concern.
On Saturday I called a bullish trend with potential to reverse. The bullish trend continues, and there seems to be no immediate impetus to change that tune as yet. Investors at this point needs to consider their short term strategy closely.
Position - Long Sirius XM Radio