"You can attract more institutional investors who might be restricted by the very low share price. The company realizes that, and they're weighing it against the negatives, like the short-selling it could trigger," Amobi says. "Even if you went up to $5 or more, I don't think all institutional investors who were prohibited before are going to rush in. Risk tolerance could still be a factor."
At the very least, subsiding delisting fears may help establish a floor for Sirius XM's share price. "You can debate how much upside there is, but it becomes a bit like a self-fulfilling prophecy," says Wunderlich's Hooligan. "If the stock stays above $1, it becomes more desirable for certain people."
-- Written by Robert Holmes in Boston.