By Brandon Matthews
It seems there is some confusion as to what March 15th will mean for Sirius XM Radio (Nasdaq: SIRI). The simple answer, as we know now, is nothing. Get the date out of your head, because it is absolutely meaningless.
It became meaningless last week, when Sirius XM CEO announced that the company would appeal any letter it would receive if its shares fell short of maintaining the $1.00 minimum bid for ten consecutive trading days. Sirius XM had a certain window to trade above $1.00 for ten days, in order to avoid being notified by Nasdaq that it could be delisted based on its minimum bid requirement. That window will end on March 15, 2010, and several others will open.
With plans to appeal already announced, the March 15th deadline to regain compliance has been extended. For example, if Sirius XM shares were to close above 1.00 from today until March 16, the company would again regain compliance.
On March 16th, the Nasdaq will simply notify Sirius XM of its noncompliance. Sirius XM then has seven days to file an appeal. According to the Nasdaq, “If a request for a hearing is made within seven days, no delisting action will be taken until the company has had its hearing and the Hearing Panel has issued a written decision.” The hearing itself is usually scheduled for 30 to 45 days following its receipt of the appeal, and a written decision from the hearings panel will be issued within 35 days following the actual hearing.
“If the Panel determines that the company has presented a definitive plan that will likely enable it to achieve and sustain long-term compliance, it may grant the company a conditional listing, known as an exception. Exceptions are of limited duration and often incorporate milestones measuring the company’s progress in regaining compliance. A Panel has discretion to grant an exception not to exceed 180 days from the date of the Staff delisting notification.”
The Hearings Panel can then grant up to 180 additional days for Sirius XM to regain compliance, and the seperate Listing Counsel can grant another 180 days, up to a maximum 360 additional days from the date of the notice of noncompliance. This allows Sirius XM plenty of time to grow its share price over the course of the year. If at any time during this process shares remain above the $1.00 minimum bid requirement for 10 consecutive days, Sirius XM will be found in compliance and no further action will be necessary.
For more information, listen to our Satwaves Radio interview with Indiana University Professor of Law, Antony Page. An expert in Securities Regulation, whom discussed the Nasdaq’s recently updated rules, as well as the hearing and appeal processes for non-compliant companies.
Position: Long SIRI
Nasdaq Legal & Compliance FAQ’s
Good article – Sirius is going to clear a $1 and not look back – forget the analysts. As you clearly stated – this compliance thing is not an issue. Growth is here and now……… and Sirius is poised to capture it.
They will not remove one the most traded stocks. This is more then just Sirius getting over $1, it is also about the amount of money moving around in the daily trade volume.