With listed stocks getting knocked around, the New York Stock Exchange is considering extending temporary relief from listing requirements. Once a company is dropped from the exchange, it runs risks ranging from market cap loss to limited liquidity. But NYSE Euronext (NYSE: NYX) CEO Duncan Niederauer was clear that the moves are not permanent. For now, the goal remains to protect companies that are at risk of being delisted. This comes after the S&P 500 fell 38% last year -- its worst performance since 1937.
The two rules that have been relaxed are the maintenance of a share price of at least $1 and a market cap of at least $15 million. The return of both measures was delayed back in April. Currently, 31 companies on the NYSE are at risk, including Blockbuster Inc. (NYSE: BBI) and Lear Corp (NYSE: LEA).
In support of the notion that this is a temporary move, Niderauer did say that the stock market and the economy as a whole have improved. The S&P 500 (CME: $INX) was up 34% since its 12-year low on March 9, 2009.
The NYSE's decision to extend the relaxed conditions should give several companies the elbow room they need to recover. Removing the safety net -- and the subsequent delisting -- would doubtless impede both their individual recoveries and that of the broader market.
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