I “reported” before the market open that SIRI jumped considerably in the pre-market. Well at that time I didn’t know why, but now I do. It’s because of this. Yes, Howard Stern, in all his magnificence, decided to stay with Sirius XM radio.

I have a few thousand shares of SIRI myself, and although I’m happy that the stock is finally going up, I don’t think this is good news for the company (it is excellent news for Howard Stern though).

Why?

Howard Stern’s contract is worth $500 million, or almost 9% of Sirius’ total market capitalization (valued at $5.5 billion at the current share price). Howard Stern is costly, and I don’t know how much trash and nonsense he has left to throw at people for the next 5 years (the contract is through 2015) to keep them interested.

Sirius was a funny stock a few months ago when I first examined it, but then I took another look and I found it’s undervalued, not because the satellite radio has Howard Stern, but because nearly every new car in North America comes with Siriux XM Radio already built-in, and most people actually subscribe to the service after their free months expire.

Sirius, in my opinion, is doing better by itself, and doesn’t need to rely on one person (with a shrinking popularity and media interest since the second half of this decade) to lift the company. What if that person dies? What will happen to the company, and more importantly, to SIRI? And even more importantly, to those investors holding SIRI?

The $500 million that are being spent on Howard Stern are much better spent elsewhere, like in creating new shows, hiring new talents, expanding into new territories (Europe, and the Middle East) and cultures. This will make Sirius a famous brand across the world, not just on a continent with a struggling economy.

Sirius has 3.93 billion shares, nearly 4 times the number of shares for Apple, but don’t expect its price to reach anywhere near 1% of Apple’s share price, even by the end of next year, unless they clean up their act and have a better vision for the future.