The New York Stock Exchange has put out a new policy that temporarily lowers the minimum market capitalization requirement for public companies. The move will allow several broadcasters to avoid delisting. A similar move regarding minimum stock price was enacted and then extended by NASDAQ.
The move by NYSE allows companies like Citadel, Emmis, Regent, Saga, and others to maintain their listing status as the economic downturn remains a major factor in the markets. Sirius XM Radio is below the $1.00 minimum price requirement to remain listed on NASDAQ, but moves by the exchanges have essentially put a freeze on any delisting.
Specific to Sirius, the NASDAQ freeze is in effect until the summer. Extensions on delisting would potentially take the company into 2010 before they would have the potential for delisting, and that is only if their price remains below $1. Shareholders have already approved the use of a reverse split, which in effect could bring the company above the delisting threshold. That reverse split authorization expires December 31, 2009.
Media companies have taken a virtual beating across the board. A contraction in advertising has lasted for several months, and while there are some signs that things are reversing, it is not yet to a point where confidence is expressed by the street.
Position – Long Sirius XM