Shorts Hope For Sirius (SIRI) Takedown
December 12, 2007 by Douglas A. McIntyreShort seller are certainly willing to bet against the future prospects of Sirius Satellite Radio (SIRI). Shares sold short in the company rose 14.4 million between November 15 and November 30. The entire short interest in the company now stands at a staggering 113.5 million shares.
Those betting against Sirius believe that one of two things will happen. The first is that the merger with XM Satellite (XMSR) will not go through. That would almost certainly depress both stocks. The market is counting on the merger for cost savings.
But, even if the merger is approved, the two companies each have well over $1 billion in long-term debt in a market that hates debt and is not likely to extend over-extended companies any extra cash.
Shorts are gambling on a Sirius crash and burn.
Douglas A. McIntyre
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