By Relmor Demitrius -
Sirius XM enters this week with a lot of uncertainty in the air regarding its status on a potential reverse split, and what are exactly the dates of interest for them in determining their listing requirements. This article will try to help answer some of those questions. As is usually the case in the investment world, private investors are left to their own devices in determining facts and processing comments from management on these touchy investment issues. Getting a straight answer out of a company on a highly volatile issue is a lesson in futility. Sirius XM can only of course give the legal answer, the guarded response, or in most cases even the obvious answer. There is potential in this situation for hints or motives of intent in regards to these issues. We know the facts of the process of getting an exception and we know Sirius XM’s stated intent and opinion on the subject.
On the issue of the reverse split to stay delisting from the Nasdaq Global Market, Mel Karmazin, CEO of Sirius XM Radio (Nasdaq:SIRI), has been very vocal. Regardless of the debate that a reverse stock split is good or bad for the company, let’s just focus on the rules and dates and comments from Mel in regards to this issue.
Mel Karmazin has stated time and time again, with absolutely no variance in his opinion, that Sirius XM will issue a reverse split,(the stockholders have voted management the authority to enact a reverse split to remain listed on the Nasdaq Global Market at any time prior to June 30th), only to avoid delisting. It has been Sirius XM’s position they the company did not want to do one.
Mel has stated that he has been working with the SEC and the NASDAQ on a possible exception.
According to NASDAQ current bid price rules, Sirius XM can have up to 7 calendar days to file a request for a hearing to seek an exception, after March 15th passes. As Mel has stated he is trying for an “extension”(it’s actually called an exception according to NASDAQ diction, of up to another 180 days from the expiration of the original non compliance period of 180 days that ends on March 15th(no one gets an exception indefinitely). Since Mel has stated he intends to fight a forced reverse split I would expect the following to occur. That gives a total of 360 days from September 17th to get the price over $1, if successful in their hearing.
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