How low will Sirius XM (SIRI) go? The satellite radio company closed at $0.14 today, down 14% on the day and down 30% from Tuesday, when it closed at $0.20.

Why? No Sirius-specific news, again, but more general doom and gloom, and bad news from the auto industry, where Sirius gets most of its new subscribers.

At least one financial analyst is now even comfortable being quoted using the "B" word -- bankruptcy.

CNNMoney: "The outlook for Sirius XM has grown increasingly worrisome and at the current time looks bleak," said Frederick Moran, an analyst with Stanford Group. "At this point, you have to question whether Sirius XM will survive 2009 in its current structure. There is a likelihood that it could enter bankruptcy."

As my colleague Henry Blodget said Tuesday, yes, Sirius could go to zero. (We've updated the numbers as Sirius' market cap has had $200 million wiped off in the last two days.)

Mel Karmazin's company currently has an equity market capitalization (value of the stock) of $455 million. It also $360 million of cash and $3.3 billion of debt, so its "enterprise value"--the implied value of the business itself--is about $3.5 billion. The only thing that has to happen for Sirius (SIRI) stock to go to zero is for the market to conclude that the company is worth less than $3 billion. This would wipe out the company's stock value, leaving the company in the hands of the debt-holders.

Why might the market soon conclude that Sirius is worth less than $3 billion? Because it's running out of cash. In the first 9 months of this year, Sirius had negative free cash flow (cash from operations - capex) of $300 million. $360 million of cash won't last long at that burn rate.

Sirius's stock is now low enough that it will be hard to raise capital by selling stock, and we can't imagine who would be willing to lend the company money right now. That means the company's cash cushion is likely to get dangerously low, perhaps forcing Sirius into a highly dilutive equity deal that will put additional pressure on the stock. So it's not hard to see how the stock could go to zero (or close to it).

See Also:

Yes, Sirius XM Can Certainly Go To Zero

Sirius XM Hits New Low: 20 Cents

Sirius XM: Our Christmas Will Suck

Now He Tells Us: Sirius XM Sees Slower Growth Ahead