Sirius: We’ll Just Put This Delisting Notice in the Circular File
It was inevitable, really. Having given up the gains that pushed its shares past $1 and failed to close over that threshold for 10 straight days by March 15, Sirius XM invited a delisting notice. And Wednesday afternoon, Nasdaq gave it one, warning that the company’s shares have fallen out of compliance with its minimum bid requirement of $1 and that Sirius (SIRI) is in danger of being kicked to the Pink Sheets.
An ominous threat, but one not likely to be carried out. Sirius said back in February that it would appeal such a delisting notice and seek an extension from Nasdaq, and that’s exactly what the company is doing.
In a press release announcing the notice, Sirius said it will request a hearing before a Nasdaq Listing Qualifications Panel and petition it for a continued listing pending its return to compliance (SatWaves has a good overview of how this will play out). And the company seems quite confident it will get the hearing.
“SIRIUS XM is one of the most liquid securities on The NASDAQ Global Select Market,” Sirius CEO Mel Karmazin said in a statement. “We have a large investor base consisting of both individual and prominent institutional stockholders; and our equity capitalization is greater than approximately 92 percent of the companies listed on The NASDAQ Global Select Market. We are committed to remaining listed on The NASDAQ Global Select Market.”
Frankly, with over 3.7 billion shares outstanding, there’s little reason to fear Sirius will be booted from Nasdaq. And if you do harbor such fears, consider this: A few days ago the exchange added Sirius to its Nasdaq Q-50 Index, which, according to the release announcing it, “is designed to track the performance of the 50 securities that are next in line to replace the securities currently included in the NASDAQ-100 Index.” If Nasdaq were truly preparing to delist Sirius, why would it bother adding the company to the Q-50?