Delisting Clarity on Sirius XM Radio

With the stock price of Sirius XM Radio (SIRI) under $1.00, there has been a lot of discussion and questions about the stock being delisted from the NASDAQ. While this is a concern for shareholders, I have personally always maintained that the issue would be a long and drawn out process, and that there are many factors to consider. Included in these considerations are some actions that have been taken as a result of the current financial crisis we have all seen in the markets.

What does all this mean?

• With the three month moratorium now in place through January 19, 2009, companies currently in the 30 day delisting clock will be reset.
• Thus, assuming that SIRI still has a bid under $1.00 on January 20th, that day would be the first day of the 30 day initial delisting clock.

For more clarity, companies that have already received an initial delisting notice and are in their 180 day grace period, the 180 day period will be frozen but not reset. Thus, if they are on day 25 now, January 20th would represent their day 26. This does not apply to Sirius XM.

Some concern about the reverse split mentioned in the annual meeting proxy also likely centers around this delisting issue. The company has to try to put plans in place that will get the share price above the $1.00 threshold. A reverse split would help accomplish that.

Update: I have received a lot of e-mail about the source of the delisting rule change at NASDAQ. On the morning of the filing I was informed about the situation, and then sought further clarity. With the rule change seeming to be news that would make the usual channels, coupled with my meetings and having to catch a plane, I did not feel the need at the time to link to the specific changes on the NASDAQ site.

It appears that most news sources did not pick up the news, and that many have questions as to exactly where this information can be found. The filing is indeed on the NASDAQ site, and more specifically, the PDF can be found through the link noted above.

It is my hope that this will answer questions as to the source of the delisting news. As to why other news outlets did not pick this up is beyond my control.

Position - Long SIRI

Comments

[moltenfire:]

It's not reported by other news outlets because SR-NASDAQ-2008-082 is a proposed rule change. The proposal is in the public consultation stage and will remain pending until at least 21 days after it's published in the Federal Register. As of Oct 19 it's not yet published on the Register.

That said, the proposal seems like a motherhood proposition given the current equity market downturn, so it's probably only a matter of time before it's approved. Nonetheless, it's not a slam dunk just yet.

2008 Oct 19 08:06 AM

[mlongj:]

Sirius retires 30.5 million of convertibles due in Feb 09

Press release 8pm monday night.

Long Sirius

2008 Oct 21 07:17 AM