Sirius XM Holdings Inc (SIRI)

[eastunder]

NASA Warning Sends Sirius XM Shares Lower
Posted on June 8, 2010 Brandon Matthews
By Brandon Matthews

Sirius XM Radio (NASDAQ: SIRI) just can’t seem to catch a break. Just when it seems all the stars have aligned perfectly for SIRI investors, our nearest star, the sun decides to wake up.

Today, NASA issued a warning that is being reported on every major news channel that a massive solar storm threatens to take out services that are provided by satellites here on earth. The untimely fear mongering report, which it seems occurs on nearly an annual basis has some investors fleeing from stocks such as Sirius XM Radio.

In truth, the odds of a solar flare being hurled directly at earth are so minimal, that your chances are better at winning powerball. There are also safeguards in place with regards to the satellites themselves, in which advanced warning of a solar flare will result in a shutdown of the satellites to protect their delicate electronics. Problems occur from the magnetic field that is generated rather than the flares themselves.
According to NASA:

A century-class solar storm could result in 20 times more damage than the devastation caused by Hurricane Katrina in the south-eastern US in August 2005. The storm killed 1,800 people and caused damages worth $81 billion (roughly €68 billion).

The Sirius and XM fleets are well protected, yet this is a new risk that has investors even more fearful, as if the overall markets and general economy weren’t enough.

Position: Long SIRI