Sirius XM shares are in free fall after a short squeeze event sent SIRI stock skyrocketing last week. Here’s the latest.
The SIRI stock saw its biggest one-day percentage gain since March 2009 last week. That’s because an estimated 34% of publicly available stock is sold short—to bearish investors looking to buy them back at a lower price later on. When a short squeeze occurs, these investors must buy the stock to cover their sale and limit losses as the stock gains value instead of losing.
“The large number of shares held short along with a relatively small float provided fertile ground for a short squeeze as seen on July 20,” Morningstar analyst Neil Macker writes. The stock has dropped 15% into Tuesday, making it the largest percentage decline for SIRI stock since March 16, 2020. Despite the price action due to the short squeeze, analyst Matthew Harrigan says he believes SIRI does have strong fundamentals.
“Despite the likely immediate SiriusXM stock price retreat we do regard the business as fundamentally attractive, with the likelihood of a transaction with Liberty somewhat amplified by the Braves split-off and August 3 trading stock reclassification and the creation of the new Liberty Live trading stock,” Harrigan continues. Liberty Media Corp (owner of Sirius XM) recently spun off its Atlanta Braves team parent, Atlanta Braves Holding Inc.
MarketWatch reports of 16 analysts surveyed about the price movement of SIRI stock, two have a buy rating, six have a hold rating, and eight have an underweight or sell rating for Sirius XM stock. The stock has risen 80% in the last three months, but it continues its free fall into the second day as the short squeeze event seems to have spiked and is now tapering off as price pressure wanes.
SIRI stock has a 52-week high of $7.95 and a 52-week low of $3.32.