Friday, May 25, 2007

Short Positions Decline In SDARS

May 25, 2007
Tyler Savery

Many investors look at the short position in an equity in an effort to track sentiment. There are many things to consider when looking at the the short side of an equity, and one of those items is the convertible shares that are in play.

Convertible shares often translate to a short interest. the reason is that the company that receives the convertibles can virtually guarantee a profit by then shorting the stock. Both Sirius and XM have convertible shares in play, and thus, there will naturally be a short position.

When looking at a short position, perhaps the biggest indicator regarding sentiment happens with large shifts. This is what has happened in SDARS over the past month.

As of May 15, 2007 the short interest in SDARS has declined substantially:


---DATE------Short Interest

May 15, 2007----- 91,292,203
Apr. 13, 2007---- 120,435,858
Mar. 15, 2007---- 123,631,119
Feb. 15, 2007---- 125,133,004
Jan. 12, 2007---- 118,871,835
Dec. 15, 2006---- 141,092,901
Nov. 15, 2006---- 148,301,811
Oct. 13, 2006---- 142,439,294
Sep. 15, 2006---- 129,495,599
Aug. 15, 2006----129,064,719
Jul. 14, 2006 ----110,127,890
Jun. 15, 2006----147,317,349

This represents a decline of 24% on the short side of the house, and a substantial change in position.


----Date------Short Interest

May 15, 2007---- 24,460,867
Apr. 13, 2007---- 30,854,117
Mar. 15, 2007---- 31,202,313
Feb. 15, 2007---- 28,936,952
Jan. 12, 2007---- 33,975,151
Dec. 15, 2006---- 33,106,575
Nov. 15, 2006--- 32,034,550
Oct. 13, 2006---- 33,869,653
Sep. 15, 2006---- 30,195,001
Aug. 15, 2006---- 28,795,151
Jul. 14, 2006---- 37,064,358
Jun. 15, 2006---- 39,344,810

For XM this represents a 21% shift down in short interest, and again, a substantial change.

Both Sirius and XM are now at their respective lowest points of short interest in quite some time. Does this "call a bottom" on these stocks? That is tough to tell, but coupled with the ability of these equities to hold up in the face of the O & A news, the satellite issues at XM, and the Senator Kohl's sentiment headlines, investors that are bullish may be seeing positive signals. Only time will tell.

Position - Long Sirius, Long XM

5/25/2007 09:04:00 AM

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