Sirius XM Radio Inc (SIRI) Shorts Petering Out

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Sirius XM Radio Inc (NASDAQ:SIRI) short interest has hit a new low according to data from the NASDAQ OMX Group, Inc. (NASDAQ:NDAQ). The latest data shows that just 271.1 million of the company’s outstanding float is held short. That means that the market is more optimistic about the company’s future, even as it faces growing competition from competitors operating online.

The 271.1 million shares held short is the lowest number so far in 2013. The company’s short interest is down from a high of 414 million shares at the end of 2013. The number means that just more than 4% of the company’s shares are currently held short. Sirius XM Radio Inc (NASDAQ:SIRI) is still highly valued, but it appears the bears are being ousted after months of solid performance.

Sirius XM Radio short interest

The slowdown in Sirius shorts is a little surprising according to Rick Munarriz, who wrote a piece about the trend for The Motley Fool. He says that Sirius XM Radio Inc (NASDAQ:SIRI) gave short sellers a good deal of ammunition toward the end of the period. The company’s earnings weren’t all that positive, and its growth guidance numbers for 2014 are lower than Munarriz expected.

Munarriz is fairly bullish on the company’s prospects. He says that the product Sirius XM Radio Inc (NASDAQ:SIRI) offers is compelling enough to pay for. The company is still likely to grow next year, and its prospects have not been wiped out by competitors as many thought they would be.

Sirius XM performance

Right now is a tough time for Sirius XM Radio Inc (NASDAQ:SIRI). The company is facing intense competition from services that operate over data connections, and the company is seeing its growth being squeezed by the high profile entry of Apple Inc. (NASDAQ:AAPL) and Google Inc (NASDAQ:GOOG) into the music streaming market.

Growth is expected to decelerate in 2014, but there’s no telling what the future holds for the company. Sirius XM Radio Inc (NASDAQ:SIRI) offers a service unlike that offered by Pandora Media Inc (NYSE:P) and other competitors. It may be able to survive and thrive in the coming years, but the advent of cars equipped with data connections could put an end to the company’s success in that market.

Short interest in Sirius XM Radio Inc (NASDAQ:SIRI) may have fallen, but that doesn’t mean the company isn’t facing risks. After a close to 30% rise in stock value through this year the company is trading at more than 50 times 2012 earnings. There are plenty of risks left for the stock.

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