Last Updated Sep 17, 2009 10:09 PM EDT
When you think about it, a dollar isn't a huge number, which is why Nasdaq gets irritable when listed companies don't keep above it. Not good for image and all that. But the issue of potentially being delisted is enormous for the company, because that can start triggering all sorts of nasty financial covenants in contracts, loan agreements, insurance policies, and the like. That's to say nothing of having a stock that many people will suddenly want to stop trading, meaning not only is the company hit hard in terms of using stock for deals, but the executives suddenly find that their potential up side is closer to plunging a foot down at the end of a stairway only to find that you already had hit the last tread. A nasty shock.
It's not as though the ax is ready to drop tomorrow. Sirius has until the Ides of March next year to get into compliance. But it doesn't want an on-again, off-again danger. So it's considering a reverse stock split of at least one-to-ten, to assume that a smaller number of shares would result in prices high enough to satisfy the exchange. The board doesn't want to pull the trigger prematurely, because that could result in a number that would still end up being too low. But given that it still has problems with revenue and subscriber numbers, the stock price would appear to be the least of the metric worries.