For the second time in six months, department store chain J.C. Penney (JCPN.Q) was warned by the NYSE it was at risk of being delisted from the exchange because its stock price traded below $1 per share for 30 days or more.

The retailer said in an SEC filing that it was pursuing "measures to cure the share price non-compliance," including effecting a reverse stock split.

A reverse split merges the total shares outstanding into a smaller number, effectively raising the price of each remaining share. It doesn't change the value your stock holding, only what each individual share is worth and the number you own.

Scissors cutting a dollar bill

Image source: Getty Images.

Going to the well once more

Last August J.C. Penney had similarly been notified it was at risk of being delisted and had also considered effecting a reverse split. The shares got a boost soon after, though, after chairman Ronald Tysoe bought 1 million shares to express confidence in the company, and then the market positively reacted to its plan to launch a private label outdoor apparel line for men, a new type of store, and a narrower quarterly loss at the time.

That helped elevate its stock above the $1 threshold for several months, but dramatically downbeat Christmas holiday sales sunk J.C. Penney's shares again.

The department store chain has six months to cure the non-compliance either through organic means, such as an improving sales picture, which increases investor confidence in its survival, or through artificial means like a reverse split.