With the stock price of Sirius XM Radio under $1.00, there has been a lot of discussion and questions about the stock being delisted from the NASDAQ. While this is a concern for shareholders, I have personally always maintained that the issue would be a long and drawn out process, and that there are many factors to consider. Included in these considerations are some actions that have been taken as a result of the current financial crisis we have all seen in the markets.
What does all this mean?
- With the three month moratorium now in place through January 19, 2009, companies currently in the 30 day delisting clock will be reset.
- Thus, assuming that SIRI still has a bid under $1.00 on January 20th, that day would be the first day of the 30 day initial delisting clock.
For more clarity, companies that have already received an initial delisting notice and are in their 180 day grace period, the 180 day period will be frozen but not reset. Thus, if they are on day 25 now, January 20th would represent their day 26. This does not apply to Sirius XM.
Some concern about the reverse split mentioned in the annual meeting proxy also likely centers around this delisting issue. The company has to try to put plans in place that will get the share price above the $1.00 threshold. A reverse split would help accomplish that.
Position - Long SIRI