XM designs a lot of their new products in South Florida, where I live. I've been hearing good things about uptake in their emerging tech: maps for airline pilots and boaters, NavTraffic (real-time traffic feeds to in-car GPS systems), data streams for homeland security, advertising on the LCD screens.
Real reason to buy is to get ahead of the hype surrounding Oprah on XM for the holiday shopping season. They may also get a nice bounce from their Ipod killer stocking stuffer and the new adwords deal with Google. A few analysts may upgrade if guidance is raised at the upcoming conference call due to the new business line of targeting customers with free 3 months of service who purchase pre-owned certified cars that happen to already have XM Sat-radio factory installed.
A merger could happen, but not between XM and Sirius (although I analyst thinks the cost savings alone makes XM worth $18 after a merger). A large terrestrial radio station owner, DirecTV, Verizon Wireless, or Google would be more likely acquirers. Now that Google has bought YouTube, we know that they are no longer adverse to large deals or only building stuff in-house.
Subscriber addition estimates are pretty low so management should have little difficulty beating expectations. Not much downside risk at the current pps.