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Sirius XM: The Final Countdown

Sirius XM is officially in its tenth day of trading at or above a dollar and looks set to regain NASDAQ listing compliance.
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NEW YORK (TheStreet) -- Sirius XM (SIRI) - Get Sirius XM Holdings, Inc. Report is officially in its tenth day of trading at or above a dollar and looks set to regain NASDAQ listing compliance.

Although Sirius XM stock is down 5% Tuesday early afternoon, "it's quite a bit above a dollar," at $1.14, Barrington Research analyst James Goss notes.

Thus, assuming that Sirius XM finishes at least at a $1 Tuesday, it would have closed at or above $1 for ten consecutive business days. This means that Sirius XM's hearing with the Nasdaq on Thursday to request continued listing will be rendered moot. This would also significantly diminish the likelihood of a reverse-stock split for Sirius XM.

"They will have accomplished what they needed to accomplish to maintain their listing," Goss said.

Granted, even if Sirius XM had fallen under a dollar, the likelihood that it would have been delisted was barely existant; it is, after all, quite a substantial company. Including shares of

Liberty Capital


, which bought 40% of Sirius XM in 2009 and rescued it from bankruptcy, it's a $7.67 billion equity market cap company, Goss notes. Excluding Liberty Media, the figure works out to be about $5.5 billion.

Still, now that the $1 issue is essentially out of the picture, Sirius XM and its investors can go back to more substantive issues -- including what kind of fundamental positives Sirius XM can bring to the table. Goss, who has an outperform recommendation on the company and 12-month price target of $1.25, sees a lot more upside potential for the stock in 2011 based on continued growth of the company.

Among them are growth in subscribers as the auto sector improves; another subscriber growth source involving higher-end certified pre-owned cars coming to the market equipped with satellite radios; and the fact that the company is beginning to be positive in terms of free cash flow and its ability to pay down debt. All this would improve perception of the company.

Also, Sirius XM's growing presence in smart phone applications "never hurts," Goss said.

In about year and several months, Sirius XM will hit the three-year mark of the merger between Sirius and XM Radio and could take another look at their pricing structure then, Goss added.

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Goss certainly isn't the only analyst who's upbeat about the stock.

" With the delisting risk out of the way -- and therefore no indication that the company would proceed with a reverse stock split -- we would expect to see additional support for the stock," BGB Securities analyst Murray Arenson wrote in an e-mail. "Also, preliminary auto sales data for April looks to be down slightly, sequentially, but still solid. We will watch the automakers' incentives plans for the next few months, but the overall trend for 2010 certainly appears favorable."

S&P analyst Tuna Amobi wrote that he maintains a hold opinion on Sirius XM shares and a 12-month price target of $1.50 for now. He'll be studying the company's forward-looking commentary after its upcoming first-quarter release on May 6, hopefully to find it confirming positive trends such as improved consumer confidence and a continued, meaningful rebound in U.S. light vehicle sales.

-- Reported by Andrea Tse in New York


>>Sirius XM Above $1: Is It There to Stay?

>> Another Up-and-Down Week for Sirius XM

>> Sirius XM Stock: The $1 Question

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