It is being reported that Sirius XM is preparing for bankruptcy and this could be the week it happens.

After reading numerous stories about Sirius XM Radio (NASDAQ: SIRI) posted by my colleagues here and elsewhere, and tossing in my own two cents (see GM/Chrysler or Sirius/XM: Two losers don't equal a winner and Sirius and XM: Two losers -- A follow-up), I was pondering what, if anything, might have been missed by analysts and investors alike that has hurt the success of this company. It may be something as simple as misjudging the size of the market.

The stock market is tough enough to navigate without having to deal with roadblocks that have nothing to do with corporate execution of a business plan or normal supply-and-demand dynamics for equity securities.

We make an investment on reasonable assumptions and take the risk that such assumptions pan out. What we can't do is foresee events that are totally outside of the control of the company, economy, or ourselves. For example, if we buy a stock of a company that utilizes acquisitions as part of its strategy, we can safely assume from past examples that the government will approve or disapprove such acquisitions in a reasonable amount of time.

Sirius XM (NASDAQ: SIRI) is up against debt payments that its management has been saying would not be a problem.

According to The Wall Street Journal, "Sirius XM Satellite Radio Inc. is facing an important test of its viability this month: how it handles $174.6 million in debt coming due Feb. 17." Since the company has not reported its fourth quarter, no one knows for certain how much cash Sirius has. More debt payments are due later in the year.

Could the debt problem this month push Sirius into Chapter 11? It is impossible to tell, but the obligation has not been renegotiated or replaced with new debt.

Sirius XM Radio (NASDAQ: SIRI) shareholders approved two proposals: The first, to issue up to 3.5 million more shares, increasing the number of common stock from 4.5 million to 8 million. The second, to enact a reverse stock split by a ratio of not less than one-for-ten and not more than one-for-fifty.

Sirius faces delisting from the Nasdaq as its stock has traded below $1 since September 19. It was given a grace period until the end of January. With the reverse stock split, the satellite radio company will try to spruce up its battered stock price, avoid delisting and also pay down debt.

I doubt this will help. The problems at Sirius are great and have been exacerbated by the current economic slowdown and an auto industry in shambles. The 13.5 cent stock price reflects investor concerns. Sirius is unprofitable and has a large debt load of $1 billion, due in part in February. It also didn't have positive cash-flow for a full-year to date, but predicts breakeven cash flow in 2009, and positive cash flow in 2010.

This post is part of AOL Money & Finance's Best & Worst in Money 2008 feature.

There have been big hopes for all the nominees in this category at one time or another, but they've also suffered from questionable management moves of various sorts. So what's to root for in any of these companies?

Circuit City was founded in 1949; back then it was known as Wards Company. The big-box format and Circuit City name came as the result of a series of retail experiments, and became official in 1984. The company was listed on the New York Stock Exchange in the same year. In 1991, the company established a bank to operate its private-label credit card, and later offered a co-branded Visa. Big-box used car retailer CarMax (NYSE: KMX) was also owned by Circuit City at one point. In 2005, the company's board rejected a buyout offer; the company was worth a reported $1 billion then. The next year, Philip J. Schoonover became chairman, and ... well, the rest is history. Circuit City is now in Chapter 11.

Citigroup (NYSE: C) was formed in 1998 from one of the largest mergers in history: banking giant Citicorp and financial conglomerate Travelers Group. The company holds over 200 million customer accounts in more than 100 countries, and includes the investment services brands Smith Barney and Primerica. The company owns prominent, renowned buildings in Manhattan and Chicago, and also won naming rights to the new ball park of the New York Mets. But it was the subprime mortgage crisis that was Citigroup's undoing, resulting in the need for the recent federal bailout.

I've known for some time the risks inherent in owning Sirius XM Radio (NASDAQ: SIRI), but never in my right mind did I think the company would fail, leaving shareholders with nothing but a worthless stock certificate.

And yet here we are today with SIRI trading for 25 cents per share and a market capitalization of less than $800 million. Investors are expecting the worst with SIRI. All that remains is pure speculation on survival or failure.

It really comes down to that simple question: Will SIRI make it?

If the answer is yes, then investors can still reap a tremendous reward. If the answer is no, investors will lose everything.

How did we get to this point? The answer is quite simple. Destructive competition between two competitors in a race for supremacy that never did materialized resulted in cost structures that kept pushing profits down the road.

When it was realized that the industry could potentially lose both entities, a merger was announced. Oh, but wait, a government supposedly looking out for the interest of customers dragged its heels.

Losses mounted while both companies waited and waited and waited.

Reluctantly, the government finally approved the deal, but is it too late?

Okay, let me state clearly at the beginning here that Sirius XM (NASDAQ: SIRI) closed on Monday at $0.27 per share. Right from the start, you know we're talking about a risky stock -- a lottery ticket, as they say. And since our subject is the result of a recent merger, there's a lot of pro forma data located in the press release detailing the satellite-radio company's Q3 performance.

According to that pro forma data, revenues increased 16% to almost $613 million. The pro forma net loss was halved to $0.09 per share. It's funny, because when you look through the numbers, you almost feel compelled to come away with a good feeling about the story. Total subscribers increased 17% on a year-over-year basis, subscriber-acquisition costs decreased, cost synergies are manifesting themselves, and projections for free-cash-flow generation seem to be attractive.

However, one has to realize that an attractive cash-flow statement isn't around the corner. Positive free cash flow should begin on an annual basis in 2010. Plus, Sirius XM management must deal with refinancing its debt. And it did make a $4.8 billion write-down relating to goodwill impairment. Also, the economic problems of auto manufacturers such as Ford (NYSE: F) and General Motors (NYSE: GM) are not helping Sirius XM. If car sales are down, then adoption of the satellite-radio company's programming is challenged. It's a simple relationship.

Sirius XM Radio, Inc. (NASDAQ: SIRI) is making good on its promise to make several programming alternatives available to customers after swallowing rival XM Radio back in July.

While SIRI shares sit below $0.50 today as the Dow plummets yet again, the company's newest radio plans are aimed at increasing subscriptions. The new plans are aimed at letting customers have more choice by purchasing programming from both the Sirius side, as well as the XM side.

Looking to boost its revenue and number of subscriptions, Sirius XM Satellite Radio Inc. Thursday announced a range of new programming options that lets subscribers buy programming from both of the recently merged rival services. The "Best of Both" plan actually tips the scales at $16.99/month, which is over $4 higher than the normal $12.95/month subscription. But, that amount does give all XM subscribers to ability to hear Howard Stern while giving Sirius folks the ability to hear Oprah's satellite show.

But the big news is this: a new $6.99/month plan will allow customers to ability to choose 50 "ala carte" channels from either service. That's what many of us having been waiting for: we may only want a few channels but don't want to pay for all of them. If you've been on the satellite radio fence for a while, will you jump on board now for less than $7 a month and get your fix? You won't get Howard or some live sports without additional fees -- and only certain radios are supported -- so be prepared.

Today's markets started out strong and got stronger.

If you were a conspiracy theorist you might even make a crack noting that Wall Street had already seen the dovish FOMC comments which signaled that rate hikes are not a certainty until after the election. Throw in a substantial drop in oil to new recent lows of under $119.00 per barrel, and the rest is all gravy.

Here are today's unofficial closing bell levels:
D.J.I.A. 11,615 (+331)
S&P500 1,283.28 (+34)
NASDAQ 2,347.36 (+62)
10YR T-NOTE 4.007% (+0.035%)
52-Week Lows
Top Analyst Downgrades
Top Analyst Upgrades

Archer-Daniels Midland Company (NYSE: ADM) saw shares down over 5% in today's final minutes. Despite the stock being close to new fresh lows, traders were very unenthusiastic after the company missed earnings expectations.

Sirius Satellite Radio Inc.'s (NASDAQ: SIRI) $3.5 billion acquisition of rival XM Satellite Holdings Inc. (NASDAQ: XMSR) might at long last be approved by the Federal Communications Commission, according to the Wall Street Journal.

"Republican commissioner Deborah Taylor Tate is the only FCC member left to vote on the deal and she is expected to do so shortly, two FCC officials close to the negotiations said," the paper said. "She is expected to sign off on the deal in exchange for a consent decree that resolves several enforcement issues involving the satellite radio companies and a combined fine of about $20 million, an FCC source close to the deal."

Even with the regulatory hurdles just about cleared, the future of satellite radio is far from clear. As my colleague Douglas McIntyre noted earlier today, losses at both companies are narrowing but their subscription growth rates are slowing. Both firms also are more than $1 billion in debt.

Though I am a big fan of the medium, I wonder sometimes whether its moment in the sun has past. Remember BetaMax and 8-track players were considered cutting edge at one time.

Three of the commissioners of the FCC have voted on the Sirius (NASDAQ: SIRI) merger with XM Satellite (NASDAQ: XMSR). Two have voted in favor, and one has voted against. That leaves two other votes. In other words, the deal could still be killed.

One of the remaining commissioners has indicated that he would vote for the merger if the companies would agree to a six-year price cap on their services. According to The Wall Street Journal, "The offer was viewed as an attempt to start negotiations, but the companies so far are showing little interest in haggling."

Is it any wonder? The most recent earnings reports from the two companies indicate that, while their losses are getting smaller, their subscription growth rates are slowing. Each firm has more than $1 billion in debt and neither has ever had an operating profit. In other words, if the companies cannot raise their rates the chances of them becoming profitable are significantly curtailed.

The FCC may be putting Sirius and XM in an almost impossible position. If they are willing to make moves which could hurt their earnings longterm, they may get the votes they need for approval. If not, the merger could be scuttled.

The future of satellite radio is now based on two bad outcomes.

Douglas A. McIntyre is an editor at 247wallst.com

Today might have been one of the more boring options expiration dates. If you pretend that technology stocks weren't a part of the market, today was rather stable considering the major bounces we have seen. Oil stayed under $129.00 per barrel, which didn't give the bears much meat to chew on. We had essentially no government economic data today. Here are today's unofficial closing levels:

• DJIA 11,496.24 (+49.58)
• S&P500 1260.65 (+0.33)
• NASDAQ 2282.78 (-29.52)
• 10YR T-Note 4.081% (+0.043%)
• 52-WEEK LOWS
• Top Analyst Upgrades
• Top Analyst Downgrades

Apple Inc. (NASDAQ: AAPL) is set report earnings after the close of trading. Read a FULL EARNINGS PREVIEW. Shares of Apple were down over 3% at $166.10 in today's final minutes of trading.

Today was looking like just another one of those post-holiday trading sessions that you can look at the tape and not be able to determine if it was a win, lose, or draw. But then came the last 90 minutes of trading, and suddenly the rally caps came on. This was despite grim economic news, although that is something we just have to get used to for quite some time. Home sales posted a small unexpected increase, but we also saw a 20-year record as far as a jump in housing price declines. Consumer confidence also came in under expectations.

• DJIA 12,549.00 (+69.37)
• S&P500 1385.47 (+9.54)
• NASDAQ 2480.51 (+35.84)
• 10 YR T-Note 3.921%, +0.09%.
• 52-WEEK LOWS saw 3 DJIA components today.
• TOP 10 ANALYST CALLS

Anheuser-Busch Companies, Inc. (NYSE: BUD) saw a mixed reaction today. It may be getting a buyout offer from InBev in Europe, but Detusche Bank Securities lowered its rating to a "Hold" rating. Shares were only up marginally at $56.90 with a few minutes to the close.

Add Sirius Satellite Radio Inc. (NASDAQ: SIRI) to the list of stocks Wall Street thinks are undervalued. You heard that right.

If anyone wants to take the advice of these analysts, I have a bridge in Brooklyn I would like to sell you. Sirius, which reports earnings next week, is expected to lose 7 cents per share, down from 11 cents a year earlier, according to Thomson Financial. Revenue is due to rise more than 33% to $272.3 million. Their average price target is $3.86, higher than the $2.80 where the stock currently trades. The high target is a whopping $8.

I am still not convinced this is a good stock. Even if the XM Satellite Radio Inc. (NASDAQ: XMSR) merger happens, I don't see the company's prospects improving.

First of all, people aren't buying cars of any sort including those that come with satellite radio pre-installed. Moreover, Apple Inc. (NASDAQ: AAPL) has a device called the iPod. Perhaps you have heard of it.

"Now that many new cars offer input jacks to broadcast media player content through car stereo systems, won't that compete with the commercial-free digital music that makes satellite radio so appealing?" asks Rick Aristotle Munarriz of the Motley Fool.

Good point. Keep in mind that I am a satellite radio subscriber. In fact, I am listening to Howard 100 over the Internet right now. I also like my iPod. I find Howard Stern as amusing as most people and enjoy the commercial-free music such as the Grateful Dead Channel. But I am not sure whether I am going to need both devices in the future.

Until its future is cleared up, investors should avoid satellite radio even if they are fans of Howard.

Either short sellers don't think a merger between Sirius (NASDAQ: SIRI) and XM Satellite (NASDAQ: XMSR) will happen, or they don't believe that the deal will save the two debt-laden companies. Short interest in Sirius rose 20.2 million shares for the period ending April 15 compared with March 31. Total shares sold short hit 157.9 million. Shares short in XM also pushed up 6.3 million to 22.7 million.

The bets may be smart ones. The delay in approving the deal at the FCC has probably made it less likely that the merger will get the green light. A number of members of Congress have loudly protested that the new company would be a monopoly, They reason that a new entity would eventually raise rates sharply because there will be no competition to dampen prices.

The core problem with the merger may be more profound. Subscriber growth rates at the two companies are slowing. Both also have negative net income. At this point, neither company has predicted when it might make a profit.

The biggest burden that the companies have is their debt. Each has over $1 billion in long-term obligation to repay bonds and loans. In a poor credit environment, it is hard to see that paper getting refinanced at better rates.

A new company, even with some cost savings, could have enough debt to sink it.

Douglas A. McIntyre is an editor at 247wallst.com.