Sirius Stock: Highly Active, Headed Down

(Sirius XM article updated with additional analyst insights and the movement of Sirius XM stock.)

NEW YORK (TheStreet) -- After teasing investors in mid-February with the promise of a share-price breakthrough, Sirius XM(SIRI) has once again fallen back into penny-stock status.

On the upside, though, for traders who like liquidity: More than 120.6 million shares of Sirius XM stock had changed hands by late afternoon Monday, compared to a 50-day average daily volume of 84.1 million for the stock.

Sirius XM stock settled down 4.6% to 90 cents on Monday.

Sirius XM's current status can be attributed to an expected announcement from Cisco(CSCO) about the easing of some capacity issues relating to 3G and 4G networks, given that investors have been worrying about the impact that mobile Internet technologies could have on Sirius XM's business, according to Wunderlich Securities analyst Matthew Harrigan.

Harrigan lowered his rating on SIRIUS XM to hold from buy on March 1, while maintaining a $1 target, alluding to U.S. auto market concerns. Recently, Harrigan saw an increase in fleet sales to rental companies and corporations, which is only mildly beneficial to Sirius XM. Car sales are, of course, far more important for the company's growth.

Nevertheless, Harrigan remains relatively unconcerned about Sirius XM being delisted. Given the company's large market cap and brand visibility, Harrigan thinks that Sirius XM will get another six-month extension to regain compliance with NASDAQ listing requirements.

-- Reported by Andrea Tse in New York

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