CEO Mel Karmazin has resisted the idea of a reverse stock split for Sirius XM to get above the $1 per share minimum for Nasdaq trading. It appears increasing likely that he’ll get his way.
Having traded as low as 12 cents within the past year, the satellite radio company’s stock has been on a steady climb since getting its finances in order about a year ago. Karmzin has argued that the minimum price rule shouldn’t exist – that it should be up to the directors of a company, not a stock exchange, how many shares a company should have and what price they trade at. Even so, Sirius XM had shareholders approve a resolution giving the board of directors authority to execute a reverse split should it become necessary.
But with the stock price for Sirius XM rapidly approaching the one buck mark, it appears that Sirius XM will not have to undergo a reverse split. The Nasdaq deadline for Sirius XM to get back in compliance had beeen March 15, 2010. It is quite conceivable that the company will regain compliance by then – but it may not even be necessary.
In a little noticed action by the SEC on January 29th, Nasdaq got approval to extend its tiome period for a company to regain compliance with the minimum price rule for up to a maximum of 18 months. RBR-TVBR first learned of the action in a posting by Satwaves on the Seeking Alpha website.
RBR-TVBR observation: Sirius XM would be an obvious candidate for this special dispensation, since it is so close to the $1 mark. It may, in fact, get there in the next few weeks and not even need an extension.