Sirius XM Shares Back Under $1 (SIRI)

Sirius XM (NASDAQ:SIRI) shares have had an incredible ride these past few months and after hitting $1.18 two weeks ago traders are locking in profits.  SIRI shares are down 4% today to 97 cents, the future still looks bright and back under one buck isn't such a bad thing considering they were 15 cents one year ago.

Sirius XM Radio (SIRI:NYSE) shares are down after Wunderlich downgraded the company from Buy to Hold and setting a $1 price target. Analysts are concerned that Sirius could be hurt by lower near-term auto sales.

Via 247WallSt.com last Friday -- SIRIUS XM Radio Inc. (NASDAQ: SIRI) broke under $1.00 briefly Friday and shares closed down 4.6% at $1.02 on Friday.  After the company posted positive earnings and then traded as high as $1.18, we promised late on Friday to give an updated outlook. 

I have been behind the company for a rather long time… down at $0.15 and under, and I had noted to buy the shares, take physical delivery of the shares, and stick them in a drawer.  It is time to lighten up here.  The stock can rise, but the implied dilution from Malone and Liberty here is just too great. 

The Pandora competition coming in March and even the Howard Stern contract game are two sideshows in our analysis.  Its 3.6 billion shares already are one thing, but if Liberty were to covert its convertible preferred stake we’d be somewhere around 6.45 billion shares trying to try to capture some of the implied value at more than $2.5 billion today.  The ride might not be over, but smart money would take at least half of the position off the table now.