Sirius XM Radio (NASDAQ: SIRI) may get a bit of a lift this morning, as the company's corporate credit rating was raised by Standard & Poor's (S&P). The ratings agency upped SIRI's rating to "CCC+" from "CCC" and raised the issue-level ratings a notch. That said, S&P did keep SIRI's senior unsecured notes at "CCC-." S&P analyst Hal Diamond attributed the move to "increased comfort with the company's near-term liquidity needs," following a loan from Liberty Media. Liberty loaned SIRI money in exchange for preferred stock, which is convertible into 40% of SIRI's common shares. This investment pushed significant debt maturities from 2009 to 2011.
Diamond asserts the belief that SIRI can achieve operating cost savings, despite its "substantial debt load" and historic losses. Diamond did note that SIRI "may be challenged to meet its target of exceeding $300 million in operating profits in 2009."
SIRI is a penny stock, trading in the 35-cent range -- can it help you make money? Technically, the shares have managed to consolidate along their 10-week moving average, suggesting that they could head higher as the trendline does the same. That said, SIRI's 10-month moving average is dropping into the picture. The equity has not finished above this moving average since 2007, and it will take quite a rally for it to topple the resistance this month.
The problem with penny stocks is that they are penny stocks. People believe they can get rich quickly trading these stocks, but that will only happen if they purchase a major quantity of the stock and then dump it at a specific price. Yes, money could have been made if you purchased SIRI at six cents in February and sold it at 45 cents in March, but timing is crucial. If you are going to dabble in penny stocks, make sure to set limits and strictly adhere to the guidelines.
Why do we have a weak dollar?
Holiday hiring slow for retailers
Closing Bell: What sell-off? (AIG, ABK, EPR, MBI, JAVA, ORCL, ERTS)
Reader Comments (Page 1 of 1)
4-15-2009 @ 10:56AM
Lbean said...
I am serious, and dont call me shirley