All it took was a bit of good news to get shares of Sirius XM Radio
Yesterday's close of $1.07 may not seem like much to those who have falsely dismissed the satellite-radio operator as a speculative penny stock, but it once again starts the clock on Sirius XM's chance to avoid delisting by Nasdaq OMX Group
For those late to the story, one of the exchange's listing requirements is a share price above the $1.00 mark for 10 consecutive days. If a stock trades lower than that over a certain period of time, Nasdaq will issue a warning and give the company 180 days to return to compliance. The exchange suspended the rule during the market's recessionary downturn, but it returned to enforcement mode this past summer.
Sirius XM failed to close with a bid price above $1.00 before the March 15 deadline, and it will meet with Nasdaq later this month to appeal the decision.
The company has been here before. It closed with a bid above a buck for eight consecutive trading days earlier this year.
This time, will the outcome be different?
We'll see. Yesterday's 11% surge to $1.07 is comforting, but Sirius XM traded as high as $1.18 in February and still fell two days short of silencing the exchange.
If the stock should buckle, it's still hard to fathom that Nasdaq will boot the satellite-radio giant. Sirius XM is every inch a large cap. There are 6.5 billion shares outstanding when Liberty Capital's
Nasdaq isn't the only exchange with a $1.00 threshold. NYSE Euronext
Sirius XM stands alone as the giant that isn't currently in compliance. There are no other domestic stocks with market caps greater than $1 billion trading below $1.00. Only two -- Flagstar Bancorp
Upbeat news and improving fundamentals may make this news all moot if it's enough to keep Sirius XM above $1.00 over the next two weeks, but if the stock dips again, it would be a shocker to see Nasdaq give the heave-ho to one of its most actively traded stocks.
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Longtime Fool contributor Rick Munarriz is a subscriber to both Sirius and XM. He owns no shares in any of the stocks in this article and is also a member of the Rule Breakers analytical team, seeking out the next great growth stock early in its defiance. The Fool has a disclosure policy.