When Sirius bought XM, they gave the XM shareholders 4.6 shares for each single share of XM they held. After the merger Sirius issued even more stock to try make some more money. In all, they've added almost a billion new shares to the pile. Since the number of people buying SIRI shares didn't change much, these extra shares caused a dilution of the price and brought it down.
Sirius has many outstanding loans. They total around 3 billion dollars. These loans are coming due over the next couple of years and since Sirius hasn't got 3 Billion sitting around, they have to refinance the loans. About 1 billion of this has to be refinanced in 2009. The current financial crisis has made it difficult to borrow money. This has many investors doubting that SIRI will be able to refinance all their debt. If they can't do this, then the only other option is bankruptcy. (FWIW, Mel has only raised 300 Million of the 1 billion owed in 2009 so far).
Sirius has never made any money. They've been moving towards a profit year by year, but they still are losing a little under 1 million dollars a day. Many investors expect that due to the economic crisis and coming recession, the subscriber numbers could drop significantly in the coming year causing the daily loss to increase.
It will be interesting to see what the numbers are for the third quarter of 2008. If the numbers are down, the stock could drop some more.... The 3Q report should be released in the last week of October or the first week of November.