Will Sirius Hold $3.00? Senate Hearings Today

There are two key levels that traders watch in lower priced stocks: $5.00 is the first and then $3.00 is the second.  Some become unable to short at levels under that, but that "some" needs to emphasized because there are many that can short at any price level.  Obviously $3.00 and $5.00 are nothing compared to a $1.00 threshold for stocks in general, but these are critical levels and we aren’t trying to signal out any price direction SIRI/XMSR..

This morning Sirius Satellite Radio (SIRI-NASDAQ) is hitting $3.00, and it has even dipped under that level briefly.  Will this level hold or not?  That is the question.  These are the lowest levels since 2004, which means it’s like the company gave all the Howard Stern subscriber gains back. 

Today at 10:00 MA EST we have the Senate Commerce, Science and Transportation Committee hearing on the proposed merger of XM Satellite Radio Holdings Inc. (XMSR-NASDAQ) and Sirius Satellite Radio Inc.  This follows last week’s regulatory request for more information regarding the merger.  Here is the link and some or most of the testimony should begin to be posted soon after the hearing starts. 

What is going to to rule the roost on the stock? Right now it is all about the merger as that is becoming a do or die scenario.  Both companies need the merger to succeed.  If the Senate Committee is deemed harsh, then both of these may feel more pressure.  If things go somewhat favorably, then there may be some stabilization until the next round of news or events.

Jon C. Ogg
April 17, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.