Sirius CEO Mel Karmarzin attributes the rebound to “the broad appeal of our unrivaled programming, the benefits of a recovering auto industry and an improving economic environment for consumers.” I’d reckon that increased car sales is probably the biggest factor, given that satellite radio is heavily dependent on its appeal to drivers, most of whom still can’t listen to internet radio while on the road. The downside of this reliance is that the first year or so of satellite radio service for a new car is free. The real sign of recovery will be whether or not these new non-paying subscribers re-up when they have to shell out for it. For the quarter that just ended 45.2% of customers decided to stick around and pay, which is a little better than the 44.6% who did in the first quarter of 2009.

The news caused Sirius stock to bump back up over a dollar today for the first time since February. Nevertheless, the company remains delisted from out of compliance with NASDAQ. It will be interesting to see if Sirius’ subscriber base grows over its 2008 level again, or if 19 million ends up being a plateau. Satellite radio faces very still competition from mobile broadband this year as higher-speed 4G rolls in many major cities and those first Pandora-capable car radios hit the streets.

The satellite radio company says it will ask for a hearing with the NASDAQ Listing Qualifications Panel, at which it will ask to stay on the index “pending its return to compliance.”

“As a result, the NASDAQ staff’s letter has no effect on the listing of SIRIUS XM’s common stock at this time,” Sirius assured its investors.

“SIRIUS XM is one of the most liquid securities on The NASDAQ Global Select Market;” Sirius XM CEO Mel Karmazin added. “We have a large investor base consisting of both individual and prominent institutional stockholders; and our equity capitalization is greater than approximately 92% of the companies listed on The NASDAQ Global Select Market. We are committed to remaining listed on The NASDAQ Global Select Market.”

As we’ve reported, Sirius stock was back on the dollar menu for a while, but  it has definitely fallen into the below 90 cent dumps over the last few days. That earlier rise in fortunes probably helped the company avoid a reverse stock split, in which the number of shares are reduced and the price increased. Here’s what Sirius XM says about a reverse stock split now:

“The Company intends to take all necessary steps to maintain the listing of its common stock on The NASDAQ Global Select Market. The Company’s stockholders have granted the Company’s board of directors the discretion to effect a reverse stock split, which would bring the Company into compliance with the NASDAQ bid price requirement. However, the board of directors intends to effect the reverse stock split only if it determines the action to be in the best interests of stockholders.”

After languishing in near-penny-stock territory for the last year, Sirius XM Radio stock hit the dollar menu on Wednesday, topping out at $1.05 a share. Investors who bought their stock a year ago when it sold for less than 20 cents are probably cheering. Sirius hasn’t seen the plus size of one buck since September of 2008.

The prevailing opinion on Wall Street seems to be that investors think Sirius XM has finally gotten its financial affairs in order, along with adding a net of 257,000 listeners–more than expected–in the fourth quarter of 2009.

There also seems to be a growing confidence that, despite all the recent hoopla, Howard Stern will sign a new contract with Sirius. I don’t really understand how that’s a strong sign of strength for Sirius, although I guess it can be seen as a indicator of stability. If Sirius has to cough up another $300 million to keep Stern I really wonder if it will really be worth it. Even given Stern’s recent headlines over his claimed invitation to join American Idol, I doubt he has the magnetism to draw a significant number of new listeners. At best, Sirius can hope to hold onto the current crop of die-hard Stern fans.

But, then again, getting the stock price over $1 is only a relative achievement. Although the increase will likely help the company avoid a reverse stock split. Sirius’ viability will depend on how costly it is to retain Stern and how well it can continue to add listeners, despite very few new receivers being announced at last month’s CES.