This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Sell Sirius XM Before Earnings: Opinion

NEW YORK ( TheStreet) -- I'm not easily irritated, but nothing bugs me more than when investors put "hope" on the same level as quantitative assessments of a company, such as a cold, dissection of its income statement.

The stock market provides all sorts of hints about where it is headed, but investors often choose only those hints that point in the direction they want -- or "hope" -- the market to go.

Now I'm not going to pretend that I'm a psychologist, but as a former longtime shareholder in Sirius XM Radio (SIRI), I think I qualify to discuss what happens when "hope" in the stock market meets chronic disappointment. After all, how how many times has the company failed to meet expectations?

The company plans to report first-quarter earnings Tuesday. Some investors are clinging to the belief that the company will not only deliver a market-beating performance but will also raise subscriber guidance to make up for what was perceived to be a low-ball projection earlier in the year.

Even if Sirius raises guidance and delivers a "good" quarter, the question is what will it mean for the stock. It will mean very little if anything at all.

$2.50 and Not a Penny More

Sirius' narrative is one that has reached urban legend status. Its tale has been told in "telephone-game" style to the extent that the story gets more and more exaggerated and distorted each time it is passed on to the next person.

People say, "Here was a 5 cent stock a couple of years ago that has now grown more than 4,400% -- you should jump in on it."

But the reality is, that fairy tale has reached an end. Disappointingly, many current investors wish to hang on to the hope that somehow another 4,400% is on the horizon, failing to realize that the stock would need to reach $100 to produce that kind of return.

If the stock rose to $10 from current levels, that would represent a gain of 344%. Hitting $5 would require a gain of 126%, and reaching the more realistic $3 would represent an increase of 35%.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,042.90 -28.32 -0.17%
S&P 500 1,972.29 -5.51 -0.28%
NASDAQ 4,493.39 -12.4620 -0.28%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs