There was some serious concerns last year about Sirius as a company. Its stock was, by all standards, a penny stock, and it was moving oddly everyday. Many investors thought back then that Sirius will go bankrupt (in fact, many investors thought that it will go bankrupt back in 2008).

Things have changed in the fourth quarter of last year, and the stock broke the $1 barrier for good. I have even written favorably about Sirius, even after I made fun of the stock before. I even bought a few thousand shares myself and sold them for a small profit end of last year.

But nowadays, I am thinking that in this day and age of social networks, I’m not sure how Sirius will still be relevant a few years from now, when probably all of us will have internet connection in our cars. Why will we need a satellite radio when we can have an Internet radio? Will we need both of them? Of course not, only one will suffice, and people will most likely choose to have Internet radio, simply because they will not only have a radio, but they will have Internet as well, which is a much better thing.

I go to fairs sometimes and I see the same Sirius stand they had for the last 5 years, the colors of that stand are even wearing off. I have to say that marketing people at Sirius are not the best, and for some reason, I think they have the 90’s mentality when it comes to marketing. When was the last time you saw an ad for Sirius on a website, or on Google, for that matter?

I think Sirius lacks a lot of innovation, and in this industry, and in this day and age, innovation is what makes or breaks a stock. Stop innovating and you’ll become a dinosaur like HP or Microsoft. Innovate and you will become something like Apple. You can’t be anything in between.

Before investing in Sirius, remember the following:

– Sirius is a technology company whose main job is to provide a satellite radio service for its subscribers. Read this sentence again, and focus on the word “radio”. When was the last time you spoke with your wife and told her “Hey honey, let’s see what they have on the radio tonight?” If it weren’t for cars, radios would be dead in developed countries (where the advertising money is) at least 5 years ago. Even TV stations are becoming obsolete nowadays.

– If you don’t know or you don’t care about the above sentence, then rest assured that other investors think about it all the time, which explains the bearish movement of SIRI for the past few months.

– As soon as people will have Internet in their cars, Sirius will become obsolete. The company will be worth nothing, and the ridiculous 3.95 billion stocks (why did they make 3.95 billion stocks, did they really think that the company was worth hundreds of billions of dollars?) will be worth 3.95 billion pennies (which is something like $39.5 million).

I would say if you’re thinking short term then you can play with the stock a bit. But remember, the company has no future, and it is trading at a ridiculous P/E of 60, which means that it’ll take them 60 years to buy back all the stocks. 60 years. Where would you be by then? 6 feet under? Driving a flying car? Watching movies on thin air (not on TVs)? Or would you be still driving the same car that you’re driving today, and tuning in to Howard Stern’s (who was reinstated as an entertainer on Sirius last year for the next 5 years – a bad and costly decision) station on Sirius trying to laugh at his (really tasteless) jokes?

Personally, I wouldn’t touch this stock, and I’m confident that the company is doomed, unless they completely change their business model (which will probably scare away their investors). Oh, and don’t even think that any company would be interested in buying Sirius (unless, of course, that company is HP, which seems to be after all the trash in the technology sector these days).

Yes, Sirius will go bankrupt, it’s just a matter of a few years…