Sirius XM Satellite Radio Inc. (NASDAQ:SIRI) has been a cult stock because of its price, but little other reason. Remember when satellite radio was dead? Sirius CEO Mel Karmazin proved the naysayers wrong – temporarily – when he secured a $530 million loan from cable tycoon John Malone in 2009. Since then, Sirius has been on a tear thanks to the rebound in automotive sales. The firm looks set to conquer the used car market too. Sirius added 118% more subscribers in Q1 versus the same period a year ago. EBITDA rose by 15% to $181 million, a record. Karmazin may be looking to sell as he fights the lawsuit by Howard Stern and growing competition from Pandora (NYSE:P). Potential buyers include struggling PC makers such as Hewlett-Packard Corp. (NASDAQ:HPQ) and Dell Inc. (NASDAQ: DELL) that are looking for their next hot gizmo. Satellite radio could be part of the equation just like Palm was for HP in 2010. But like Palm, either tech stock would have a hard time figuring out just what the heck to do with SIRI after it owns the radio company.
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