On Deck tomorrow: Sirius (SIRI) Q3 07 Earnings

Sirius Satellite Radio Inc. (Public, NASDAQ:SIRI) reports earnings tomorrow at 12 PM ET. XM Satellite (NASDAQ:XMSR) said last Thursday its Q3 loss widened, despite higher subscriber numbers, as sales through retail channels slowed ahead of its planned acquisition by smaller rival Sirius. So tomorrow, do you take a short or long position on SIRI?

All this talk of a merger has this Stock Master interested, however playing SIRI is like playing Penny stocks Steve Reeves or Timothy Sykes style. Last week in a joint letter sent to Federal Communications Commissioner Jonathan Adelstein, a South Dakota native, five diverse organizations representing rural Americans from across the country voiced their support for the merger of SIRIUS Satellite Radio and XM Satellite Radio. The groups cited increased benefits for rural consumers including greater programming options and enhancements to rural information services as the main reasons behind their support.

In their letter to Commissioner Adelstein, the groups list a number of consumer benefits for rural America that would result from a merger of the two companies: "This merger is clearly in the best interest of rural consumers because it would allow a combined company to expand upon its existing services with increased efficiencies, and at the same time provide rural listeners with more diverse programming and lower pricing."

They further note that many of these efficiencies will take the form of increased diversity and breadth of programming, expanded emergency, information and weather services, and lower package prices stemming from the companies' commitment to first-of-its-kind a la carte offerings. "A merger of SIRIUS and XM will make satellite radio a more viable option for rural consumers... even in the most remote areas," they added.

That's all fine and dandy but all I care about is: If I buy the stock am I going to make money? I think it's worth the gamble because despite all the road blocks, big business in Corporate America always figures out a way to win in the end. Activity on SIRI shares has been a decent climb in the last 6 months as shown:

In spite of that, over the last 5 years the peaks and valleys of SIRI's stock have made almost all original investors take up smoking or drinking on a daily basis.

Jim Cramer talked about this stock almost every week on Mad Money for over a year and continues to do so because the public wants to know if its a good investment. From the outside it looks and feels like a good investment, but shareholders will tell you another story and when it comes down to it, it's an all out gamble.

My Spidey-Sense is telling me Sirius is going to beat the quarter and their stock is going to run. I believe the merger will go through, but with so many shares issued and trading everyday, its difficult to say SIRI is a 'good investment'. I'd rather to listen to Reeves and Sykes if I'm going to play Penny stocks and Sullivan and Brand if I'm thinking about my 401k. Shameless plugs for our collaborative website WallStNewsletters.com, but our product is a cut above the rest and the best deal in town. Sorry to "Fool.com Hidden Gems you", but its true.

At the end of the last reported quarter Sirius had a long-term debt of almost $1.3 billion. This merger is their only hope and if they only break even this quarter, wait a few weeks and buy when the stock falls on its face. Don't forget that over the last five years SIRI shares are up almost 275%. Wait to make a position until after the call, if Sirius ever becomes a 'reasonable investment' you'll have time to make a few points in the coming months.

Article by Frank Lara Jr.

Contributor at TheStockMasters.com

Disclaimer: The Author does not hold any positions or shares in the securities mentioned in this publication.

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