The race to the dollar bill is over.
Shares of Sirius XM Radio
The $1 mark became an essential target for Sirius XM after it received a delisting notice last year. It has until mid-March to comply by closing above the $1 mark for 10 consecutive trading days.
That may be easier said than done, given the wild price swings that have been typical with Sirius XM's volatile stock. I question whether Sirius XM will need to hold its pose over the next two weeks.
When pepper spray maker Mace Security International
Can Nasdaq really afford to cut ties with a company that the market deems to be worth nearly $10 billion because its share price is too small?
It only helps Sirius XM's case that daily trading volume on the stock has averaged close to 40 million shares in recent months. Cutting Sirius XM loose on principle may be bad for many of Nasdaq OMX Group
Just as "age is only a number," the same can be said of a stock price.
A reverse split has been sitting in the Sirius XM playbook since last year, just like a fire extinguisher behind an "In Case of Emergency, Break Glass" box. CEO Mel Karmazin will use it if he has to, though it's silly that something as zero-sum as a reverse stock split would be all it takes to bring Sirius XM back into exchange compliance.
During the company's second-quarter conference call last year, Sirius XM pointed out the mindless hoop-jumping the Nasdaq pricing restriction requires. The company even called out Warren Buffett, pointing out that the pricey Class A shares of Berkshire Hathaway
I see nothing wrong with a reverse split, especially for a company with billions of shares outstanding. I actually still think a reverse would be in Sirius XM's long-term interest -- regardless of how the next two weeks play out -- but a listing requirement that can be circumvented by the zero-sum switcheroo is nuts.
Hopefully Sirius XM stays perched above the $1 mark. After all of the positive developments over the past year, it deserves it. However, it would still be an interesting game of chicken between Sirius XM and Nasdaq if it falls through.
It's a game that Sirius XM will inevitably win.
Now that Sirius XM has hit the $1 mark, what will it hit next: $2 or $0.50? Share your thoughts in the comment box below.
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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.