By David “Newman” Phillips
There is no way to avoid it. This week, there is a going to be a PR release from Sirius XM (NASDAQ:SIRI) stating that they have received a delisting notice from the NASDAQ. As of the end of business on Monday, March 15th, Sirius XM officially ended their 180 day extension given to them by the NASDAQ to regain compliance with the Minimum Bid requirement of $1. As we all know, Sirius fell 2 days short with their run over $1 at the end of February. Below is a step-by-step description of the delisting process that Sirius XM will be going through over the next few days/weeks/months.
Either Tuesday or Wednesday, the NASDAQ will send Sirius XM an official notice that they are being delisted from the NASDAQ. By NASDAQ and SEC rules, the company must announce this delisting letter in a PR release “as promptly as possible, but not more than four business days following the receipt of the Staff Delisting Determination.” This means that you will see this PR hit the wires Thursday or Friday.
The company has 7 calendar days from the date of the delisting determination to appeal. No response from the company results in automatic delisting. Any appeal request will stay the suspension and delisting action pending the issuance of a written Panel Decision. Sirius XM would have to submit a hearing fee to the NASDAQ to cover the cost of the hearing within 15 calendar days from the date of the Staff Delisting Determination.
The Hearings Department will schedule the hearing within 45 days of the request for hearing. Sirius XM will be provided at least 10 calendar days notice of the hearing.
The company may submit to the Hearings Department a written plan of compliance in order to be granted an exception to delisting. The Hearings Panel can grant an exception to the continued listing standards for a period not to exceed 180 days from the date of the Staff Delisting Determination.
After the decision of the Hearings Panel, the company may appeal to the NASDAQ Listing Council. The Listing Council may also call for review a Panel Decision on its own initiative. At this time, the Listing Council may grant Sirius XM an extension of no more than 360 days from the date of the Staff Delisting Determination letter.
In the end, the Sirius XM Delisting determination is a virtual non-event. It will obviously cause some short term volatility (as if the stock wasn’t volatile enough, right?). There will be article upon article written about how Sirius is being delisted without the mention of the possibility of an appeal. The key here is to be educated investors and use negative news for a positive purpose. If you have short term trades, you may wish to take advantage of this volatility. If you are a true SIRI long, then this will be nothing but a bump in the road, and you could even use this dip to add to your long position. Do your own due diligence and decide how you want to play this event.
In the end, the fact is that Sirius XM is one of the highest volume traders, if not the highest, on NASDAQ. The NASDAQ would lose a fortune on trading fees if Sirius XM was delisted from their exchange. Absolutely nobody wins in the case of a Sirius XM delisting. It won’t happen. Not a prayer.
Contact the Author at Newman@satwaves.com
Disclosure: Long SIRI
1)Its possible that the announcement of the delisting notice and appeal, and the granting of a stay will be in one Press Release, thus reducing some of the volatility.
2)I agree there is no way Sirius will be delisted, as they still have a reverse split as an option.
3) Has the NASDAQ board ever granted another extension such as Sirius will be requesting?
4) Will Mel know, prior to requesting an extension which direction the NASDAQ board likely will rule – granting an extension or declining?
5)If he believes it will be declined will he just go ahead a do the reverse split now?
jack, it is possible (and quite likely in my opinion) that Sirius will announce that they have filed an appeal at the same time they announce that they got the delisting notice. As stated in the article, it can take upto 45 days for the appeals hearing to take place.
To your other question, yes NASDAQ does grant these extensions quite often. The company would not know ahead of time which direction the hearings pannel will lean because the hearings panel is an independant group from the NASDAQ.
what about the other option Mel proposed…
a complete waiver altogether due to market cap, that is still a real possibility. Then we no longer need to worry about listing at all.
A $2bil market cap waiver gives us plenty of room. 2 quarters I see deals announced and larger ones even confirmed.
$1.57 end of August
This is a mute point!!! Sirius is going to the nasdaq 50, where sirius meets all the requirements. Newman you should have put this in your article.
NASDAQ 50 is nothing but a tracking group. It is not an exchange. This does not affect anything in this article.
I thought the nasdaq 50 had different listing requirements.
Nasdaq 50 is the same as the Nasdaq 100, or the Russell index. It is just an index, not an exchange. It has no bearing on their listing status with NASDAQ.
OT:
BM, just read the aricle about Chrysler so I was thinking, why can’t SXM put a retail display inside the dealerships? Something nice that focuses on the plug and play units. Those units are what makes satrad fun w/ their many functions.
any thoughts?
Cell phone stores!
Sell the radios there!
That is a brilliant idea RMAN!
another great idea…
wonder if SXM’s marketing group comes down off the 34th floor to see the many practical marketing options.
How much did they spend on the ‘largest promotion in Sirius’ history’? Millions? Had they spent that on stickers to their subscribers, there would be MANY more people reached than that tv ad they had.
or, like suggested, money to display in cell phone stores or dealerships.
I think to save money, SXM’s marketing team (or pair) work the same hours as Stern.
It is too bad Wunderlich came out w/ a view they later back peddled on 2 days later. I feel this was done w/ the intent of shorting the stock. If they would have come out w/ the 2nd report on the 9th day we would not be talking at all about de-listing. Sirius would be at a s/p of about $1.25 or higher. Another set back, but the cream will rise to the top! Why regulated the financial industry if the security cops are inept!
Brandon, If you have any network of communication to Mel & co. I think it would be constructive to let him know that he needs more staffing for customer services and his sales people to be more informed on the products and offerings. On one hand it may show that the volume is up and there are growing pains but to have people on hold on customer service for 30 minutes is not acceptable. I bought 3 new radios and sales answered in less than a minute but when I needed help from service it was another story! I’ve heard these same concerns from friends etc.
I agree. However, I also have sent BM several messages regarding the horrible customer service…his reply has been it is just bashers posting lies on the internet. Yet, I experienced their awful service fist hand.
in short, it sucks!!
With these recent SIRI upgrades and great news on their depth managment the stock has been stuck at $0.90 and looking more likely to go into the 80s, and since Sirius XM Delisting from NASDAQ will not happen why is the stock not moving up just like the rest of the other stocks?
My research say “profit taking” and bargain hunting approaching the delisting threat. That threat is now here and passing. We are coming out of the back wall of the storm. The sky will soon be blue and the water calm. But that back wall is sometimes rougher that the front side. Buying to me is the wealth acquisition answer – never let a good preceived crisis go to waste. Talley ho!
This is exactly what I was searching for on yahoo, I guess I got my answer! lol