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Eagle Point Capital and I have been working closely on SiriusXM. This is the first piece of analysis we will be sharing together, with more to come in the months ahead. $SIRI seems very cheap at 6.5x FCF, a 15% free cash flow yield. The low valuation reflects the market consensus that the business is a melting ice cube. The data tells a different story. The stock’s valuation does not take into account the company’s top-line stability, bottom-line growth potential as a capex cycle winds down, a partnership with YouTube, or its unused and unneeded spectrum, which is a hidden asset. The combination of a low valuation, high short interest, and several looming catalysts make SIRI a likely short squeeze candidate. Cont.. 👇 Sirius enjoys a loyal subscriber base with monthly churn around 1.5%. Netflix has monthly churn of 2.0-2.5%, Prime Video’s churn is ~3.5% and the industry average for streaming services is 5-6%. COVID pulled demand forward, causing subscriber growth to stagnate afterward. That’s now ending. The subscriber base has grown modestly and remains stable, even in light of price hikes. Sirius lost 350,000 subscribers in 2025 but has returned to growth, adding 22,000 subscribers in the second quarter. The business has a massive installed base of ~33 million subscribers. They’ve recently completed the heavy 5-year period of their 15-year satellite capex cycle. The wind down of satellite capex will boost FCF next year and beyond. In April, Sirius became the exclusive U.S. advertising representative for YouTube's audio-first ad inventory across YouTube and YouTube Music. Sirius will place ads for all YouTube content consumed in an audio-first format. The partnership gives SiriusXM's ad platform access to 255 million monthly listeners and transforms the business from a satellite radio provider into the central clearinghouse for digital audio advertising in North America. Analysts expect that the partnership could generate ~$350-$400 million of incremental EBITDA by 2029 which would boost earnings by mid-single-digits annually. Sirius also owns an underappreciated asset, an exclusive, contiguous 25 MHz nationwide spectrum license in the 2.3 GHz S-band. Sirius has redundant spectrum and doesn’t need it all to support its core business. Management understands the value of their spectrum and will consider selling or licensing it if the right deal presents itself. Analysts value it at $4-8 billion. SiriusXM’s market cap is $8.8 billion. Sirius could be an attractive acquisition for a tech company like Google or Apple. It has proprietary technology installed in over 180 million vehicles along with 80% of new cars and trucks being manufactured, a working constellation of satellites, and the spectrum to tie them together. Deleveraging is nearly complete and buybacks are poised to ramp up. The stock yields 4.1% from its dividend and buybacks will add to it. Over the last decade SIRI has reduced its share count by 4% per year and at the current price management could retire a meaningfully higher percentage of shares annually. A significant percentage of SIRI's float is held by long-term owners including 37% ownership by Berkshire Hathaway. The stock has high short interest of over 11% and a 10+ days-to-cover ratio. Any unexpected bullish catalyst, such as faster-than-expected monetization from the YouTube advertising partnership or strong Q3/Q4 earnings, could trigger a short squeeze, as bears would face illiquidity trying to buy back shares quickly. This is one view based on our work with Eagle Point Capital. Do your own research.