Please ensure Javascript is enabled for purposes of website accessibility

Break the Buck and the Buck Breaks You

By Rick Munarriz - Updated Apr 5, 2017 at 8:06PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The NYSE boots Thornburg Mortgage from its listings.

The New York Stock Exchange won't have Thornburg Mortgage (NYSE:TMA) to kick around anymore. Shares of the troubled home-loan company are being delisted after tomorrow's close.

We've seen a ton of stocks with household names fall below the $1 mark this year. Now they're starting to pay the price.

Thornburg Mortgage has been on the clock since May, after its stock traded for less than a dollar for 30 consecutive trading days. The exchange then gave the company six months to get its stock price back on the good side of the buck.

Reverse splits are typically the easy way out. Online apparel retailer Bluefly (NASDAQ:BFLY) did exactly that earlier this year. But for now, Thornburg won't fight the delisting, bowing out of NYSE Euronext's (NYSE:NYX) historic exchange to settle for more obscure trading on the OTC Bulletin Board and/or the pink sheets.

With so many stocks on Wall Street's dollar menu, expect a lot more companies to be forced into deciding between a reverse split and expulsion from the exchange. Terrestrial radio's Citadel Broadcasting (NYSE:CDL), amusement park operator Six Flags (NYSE:SIX), and satellite radio giant Sirius XM (NASDAQ:SIRI) are all on the clock and considering reverse splits.

Their dilemma is unfortunate. Reverse splits are zero-sum games, but they're sadly becoming the best way out for some of these companies. Hopefully, the others will put up more of a fight than Thornburg, or the exchange itself may have to reconsider its listing requirements during this brutal equity downturn.

Further fully listed Foolishness:

NYSE Euronext is a Motley Fool Rule Breakers recommendation. Try any of our Foolish newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz takes pride in ordering from the Mickey D's dollar menu. He owns shares in Six Flags. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool's disclosure policy's preferred form of split is "banana."

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

NYSE Holdings LLC Stock Quote
NYSE Holdings LLC
NYX.DL
Sirius XM Holdings Inc. Stock Quote
Sirius XM Holdings Inc.
SIRI
$6.73 (-0.15%) $0.01
Six Flags Entertainment Corporation Stock Quote
Six Flags Entertainment Corporation
SIX
$21.12 (-18.17%) $-4.69

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
390%
 
S&P 500 Returns
125%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/12/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.