Surprise Auto Winner.... SIRIUS XM (SIRI, DTV)

SIRIUS XM Radio Inc. (NASDAQ: SIRI) may have been one of the surprise winners so far in 2010.  While there are still many problems at SIRIUS XM, the company now looks to be the big winner in the latest round of auto sales data released Tuesday.  The gains from Ford and Toyota may have dwarfed the woes elsewhere in auto sales and in the economy.

SIRIUS XM traded over 40 million shares on Monday and rose over 5% to the highest intra-day price since December 2, 2009 and the highest closing bell price since before Thanksgiving.  But the trading volume of more than 40 million shares was the highest seen since November 12, 2009.

One of the causes for Monday’s move on top of a strong stock market was a Motley Fool article — yes really — asking if DirecTV Group, Inc. (NYSE: DTV) might be a buyer of the company.  This is actually nothing new about this rumor.  John Malone came to the rescue once here, and some believe he will have an appetite for the company.  If this could be done in a way that was extremely beneficial for taxes, Malone might have an interest.  On the other side of the equation, that deal would be against shareholders, the belief is that he would definitely have an interest if he could pick the company for a song in a reorganization if that ever comes up.

Also worth noting was that even at the end of November, CEO Mel Karmazin said that holiday sales were matching expectations.  The big question to consider in 2010 is what happens with the Howard Stern contract at the end of this year…..

Tuesday’s gain of over 6% to $0.685 on 52 million shares might make this move stand out even more than it did Monday.

JON C. OGG
January 5, 2010