Time To Cover Sirius XM Shorts
Like a thief in the night, holders of Sirius XM short positions are scrambling to cover. According to Satwaves.com, Sirius XM short interest has fallen 32.69% from 310,672,182 shares to 209,124,306 in only a 2 week period; a decrease of 101,547,876 shares.
A check of the NASDAQ market site verifies this information which brings the number of Sirius XM shares short to nearly the levels of the pre-merged stand-alone company. It would seem that the shorts are taking advantage of a suppressed stock price to cover, as the “upside” potential of a short position in Sirius XM has seemingly diminished.
With the knowledge of the recent loan of 168 million shares to short against the convertibles, it would seem that few true shorts remain. A recent Reuters report on overall short interest indicates “that investors may think the worst of the market downturn may be over.”
With over 200 million short shares remaining, those that continue to hold positions short may find themselves at the losing end of any good news reports going forward, as very few others will be there to support their positions and risk fighting renewed strength from the buy side of the ledger.
Position: Long SIRI
BRANDON WAY TO GO BINGO
IM glade you gave props to crfceo because hes writing post when you guys are doing research and visa versa
Take THAT Cramer!
FWIW, apparently everyone on the Yahoo board forgot about the Arbitrage players having their short positions closed out with the closing of the merger. They don’t seem to get it, so I’ll pass the word here…
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Arbitrage players who bought XM and shorted Sirius prior to the merger closing. For every share long XM, they shorted 4.6 shares of Sirius. When the merger closes, their XM shares converted to Sirius shares — which they used to close out their Sirius short position. No need to buy to close on the open market.
100 million sounds about right, though I would have thought it would have been more.
Nothing outrageous and nothing conspiratorial — just a normal function of the market.
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Ha! Ha! Fidelity just pointed fingers at Goldman Sachs as the underwriter of the securities under investigation by Cuomo!!!
Karma is a BITCH! Go get em Cuomo.
This plus possible new rules coming from the SEC against naked shorting is music to my ears.
LOVE it. 🙂
I usually totally IGNORE anything from Motley Fool, but one of their recent posts about the 4th quarter caught my eye and makes perfect sense to me.
DIRECT QUOTE: “2. Get ready for some Sirius gains
Shares of Sirius XM Radio (Nasdaq: SIRI) have fallen sharply in each of the past four quarters. Aren’t shell-shocked investors due for a break? They are, but that’s not the only reason to expect Sirius XM to beat the market over the next three months.
Have you noticed how the stock has been in a narrow trading range since closing on its merger with XM? Get used to it. As a rare combination of equals — a merger in the truest sense — the number of shares outstanding has doubled. It will take a lot to move this stock around the way it used to.
That may be bad news for the bulls who hope the stock will price itself out of Happy Meal territory, but it also will keep the stock from tanking for anything other than dire model-altering news. That will shake out many of the speculators on the long and short side, and bring in investors who believe that a company with 18.6 million subscribers — and growing — can be a viable business once the synergies get a shot to simmer.”
END QUOTE
friggin:
i’m told I’m wrong quite often, so let me be the first to point out my prediction of a trading range from 2 weeks ago…
https://siriusbuzz.com/sirius-xm-whats-going-on-with-the-stock.php
Regan,
Keep in mind TMF recommened XM at 32.00 and change. Still want to trust them? ..TMF’s goal is is crap out senseless articles to get hits and sell subscritions..like a Cramer, only with another name.
Of course Plowboy. I know that. It’s ALL bullshit. I put NO faith in ANY one source.
Especially TMF. I only quoted them in this instance, because it is pretty much how I feel that we are practically as low as we will probably go baring some unknown FREAK occurrence. That coupled with what I feel is positive news coming from SiriusXM over the next few quarters makes me cautiously but realistically optimistic.
If the 18 month merger delay and the unexpected way it closed proved anything its that NO ONE knows for sure what is going to happen.
But I’m more confident now, even in the midst of a F’d up economy than I ever was before.
How can 100 million short shares cover as the pps goes down. What is wrong here?
SiriusXMInvestor, because (for the most part) the Arb players who closed their positions — did so without having to buy shares on the open market.
They closed their short positions by delivering the former XM shares (now Sirius shares) instead of buying back shares.
Even after the decrease in 100 million shorts thru the arb players…Sirius still has a hell of a lot of shorts. Only LVLT rivals it in in that department.
But many shorts are also quietly trying to cover in anticipation of sweeping naked shorting reform rumored to happen in the next few weeks.
Its going to be interesting moving forward what will happen with the remaining shorts.
In the past the Sirius shorts had TOTAL comfort because the merger limbo gave them uncertainty that was HUGELY in their favor.
But NOW…post merger…and going forward…the uncertainty isn’t so short friendly. Until Mel provides more guidance and lays out a clearer plan….the shorts still have an edge…but it’s fading.
They are hanging their hat on the debt refinancing. But for the first time in 18 months, Mel doesn’t have his hands tied behind his back. And that creates an unknown variable for them.
I for one am starting to get excited going forward. No one knows for SURE whats going to happen. But I sense the playing field between the shorts and long FINALLY leveling out in the not too distant future.
It’s resembling a fair fight again. And ya know…thats all us longs ever wanted.
Ya hear me Cramer? Weinkes?
Bring it! 🙂
Brandon great post dude our time has come like friggen said