Can Sirius XM Keep Hitting New Highs?

Sirius XM Radio (NAS: SIRI) is rolling along nicely.

Shares of the satellite radio provider hit a fresh 52-week high last week, peaking with an intraday high of $2.51 on Wednesday.

It's more than just a 52-week high, though. Last week's run pushed the stock above its $2.44 high set 15 months ago. You actually have to go all the way back to early in the summer of 2008 to find the last time that Sirius XM traded this high.

We're talking about a four-year high, and that's pretty impressive for a company that was nearly left for dead in early 2009. Investors have forgiven the massive dilution associated with giving Liberty Media (NAS: LMCA) a 40% preferred share stake in 2009. They have also learned to accept that the growing popularity of Pandora (NAS: P) isn't coming at the expense of Sirius XM's subscriber growth.

The last time Sirius XM traded this high, someone else was in the White House. The last time Sirius XM traded this high, Sirius and XM were still separate entities. Regulators didn't approve the controversial merger until late July in 2008, and by that time the shares had already slipped below $2.

Bulls will argue that Sirius XM has earned these highs. We already knew that Sirius XM closed out the second quarter with strong subscriber growth, but after seeing the company once again raise at least one component of its guidance, it would seem silly to bet against it.

The bears are still out there, of course.

There were 329.9 million shares of Sirius XM sold short at the end of July. Guess what? That's also a new high. It's also the perfect catalyst for a short squeeze, and that may be what the market got a taste of last week. Sirius XM's volume surged into the nine figures during the last four trading days of last week. A streak that long hasn't happened since last summer.

So where does that leave Sirius XM investors today? Will the media giant continue to make the naysayers regret their taste for shorting? Sirius XM's stock may be richly priced on an enterprise value basis, but there are still plenty of service improvements -- particularly on the streaming side -- to make the service even more engaging.

The highly scalable nature of the company's business given its low variable costs makes Sirius XM a tough company to bet against when it's gaining in popularity. After tacking on more than a million net subscribers during the first half of the year -- and notching a fresh four-year high last week -- this doesn't seem to be the end of the push to fresh highs.

Running of the bulls
I remain bullish on Sirius XM's future. It should come as no surprise that I'm promoting the CAPScall initiative for accountability by reiterating my bullish call on Sirius XM for Motley Fool CAPS.

I also just put out a premium report on Sirius XM Radio, detailing the challenges and opportunities that await investors who are long or short the dynamic media giant. A year of updates is also included with the report. Check it out now.

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