No one should be surprised by the delisting notice Sirius XM Radio (NASDAQ:SIRI) received this week.

Nasdaq's listing requirements state that a stock must trade for more than $1. If a stock breaks below the buck for 30 business days, it gets an alert from the exchange, along with 180 calendar days to get back on top.

Sirius XM has actually been trading below the $1 mark for nearly a year. Under Nasdaq's requirements, the stock would have been delisted earlier this year, absent a reverse stock split. However, the exchange flexed its leniency when equity prices began to crumble late last year. Now that the marketplace is stable, Nasdaq is again enforcing its $1 mandate.

Sirius XM has company. Since the exchange started the clock at the same time in August for all of its listed companies, several companies are receiving delisting notices this week. Insmed (NASDAQ:INSM), Hydrogenics (NASDAQ:HYGS), and Selectica (NASDAQ:SLTC) all have six months to get their share prices percolating.

As it stands, Sirius XM has two options if it doesn't want to be delisted:

  • Meet the minimum listing requirements by March 15, 2010.
  • Engage in a reverse stock split.

It already has shareholder approval to engage in a reverse split, but there's no need to rush there. Six months is an eternity, given Sirius XM's history of volatile trading.

Sirius XM has two more quarters to report, and any upbeat cash flow guidance or a turnaround in subscriptions could help push the stock higher. Then again, the news could also prove less than encouraging.

The $0.31 that separates Sirius XM from a stay of exchange execution, barring a reverse split, doesn't seem like much. But on this minuscule penny-stock scale, it still implies that shares have to appreciate by 45% over the next six months.

The closer we get to mid-March without a buoyant price, the greater the chances that Sirius XM flips the preapproved switch on the reverse stock split.

Reverse splits aren't fatal. AIG (NYSE:AIG) and Coeur d'Alene Mines (NYSE:CDE) are trading sharply higher since their reverse splits earlier this year. However, the splits are just like the "in case of emergency" axe behind a plate of glass. Sirius XM would prefer to put out the fire on its own before it starts breaking things.

Longtime Fool contributor Rick Munarriz is a subscriber to both Sirius and XM. He does not own shares in any of the companies in this story. He 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.