Late Thursday Sirius XM (NASDAQ: SIRI) disclosed it had received a notice from the Nasdaq stock exchange on Tuesday that its share price has closed below $1 for 30 consecutive days, and is therefore not in compliance with the exchange rules. This means it could possibly be delisted.
Sirius has until March 15, 2010, to regain compliance with the minimum bid price rule, meaning its stock has to close at or above $1 for 10 consecutive business days.
Sirius said in the statement it intends to maintain its listing, and if the stock price doesn't reach the required level it could effect a reverse stock split at a ratio of not less than 1-for-10 and not more than 1-for-50, which was already approved by stockholders in May. While the statement says the board would put into effect the split only if it's in the best interest of shareholders, that question is up in the air.
Sirius shares closed at 69 cents Thursday, which is really a long way from the 52-week low of 5 cents a share, but also not that near the 52-week high of $1.08. Year-to-date, SIRI shares have climbed 474%. While investors may want to believe the momentum will continue, shares have traded around this level for about a month now and no catalyst is in the horizon to keep them moving higher.
While the reverse split could save Sirius from delisting, such a move usually carries the stigma of desperation and more often the share price falls after the split. The most recent example is AIG's (NYSE: AIG) 1-for-20 reverse stock split in July. The same day the shares fell over 10% and remained there for about a month. While AIG stock eventually recovered -- no doubt partly due to the expectation of government support -- such examples are many.As for the long term, there are also many examples of companies trying this tactic, gaining perhaps short-term breathing room, but failing in the long-term. Nortel, which recently went belly up, did a 1-for-10 reverse stock split in 2006.
The problems at Sirius are fundamental. For years it has struggled financially while losing more and more of its competitive advantage as MP3 players and phones with media became more prevalent. Not only that, it relies on car sales to get many of its new customers, and everyone knows how car sales did the past year. Sirius needs to spend more energy on its business and less worrying about its stock price.











Reader Comments (Page 1 of 2)
9-18-2009 @ 8:51AM
J Roy said...
Does not supprize me. When they started, there was no talk or adds on the music channels and they have been increasingly slipping it in. When my subscription is up I will switch to the ipod and listen to talk free music! Several people I talked to feel the same way
9-18-2009 @ 9:07AM
Shark Bait said...
"The problems at Sirius are fundamental. For years it has struggled financially while losing more and more of its competitive advantage as MP3 players and phones with media became more prevalent. Not only that, it relies on car sales to get many of its new customers, and everyone knows how car sales did the past year. Sirius needs to spend more energy on its business and less worrying about its stock price."
Precisely what they have been concentrating on. New products, inroads into the internet and phones ... Car sales are actually improving. Your assumption that they are worried about the stock price contradicts itself as an insinuation and the fact that they have zero competition due to their content, which is what draws subscribers (just ask them) without the continual dripping of banal commercials and you have a business that is going forward and will be profitable.
What other company has survived this bloody recession, skirted the throes of bankruptcy, received loans and already is in the process of restructuring them a better rates, survived the hit to it's primary source (yes, auto's) and somehow managed to get their stock price up that incredible percentage despite the drivel that is constantly pumped out against them, just as this piece of work here is doing.
9-18-2009 @ 9:21AM
rlipf said...
sirius is the greatest thing on earth
9-18-2009 @ 9:28AM
willshak said...
My monthly subscription for Sirius/XM went from $12.95 to $14.93 last month. But, even as I pay more, there are more commercials showing up in their 'commercial free' service.
I only listen to 3 or 4 channels as it is, so I'll be dropping the service. Fortunately, the credit card I was using for payment expired at the end of last month and I won't be updating the expiration date info on their site, so they can't auto deduct the payment anymore.
9-18-2009 @ 10:15AM
Allen said...
I have had Sirius for three years and did not renew this year. I was hoping they would offer me some sort of deal to sign on again. Instead I get a letter from a collection agency for the the time the contract ended and the time they actually terminate the service. Nice going. I also recall when I signed on three years ago there was a $50 rebate which never arrived in the mail. Instead I received a letter stating I had not filled the form out properly or some BS. I believe it might of been because they did not have a pot to piss in at the time. I like the service and would consider renewing again but think the company kinda sucks.
9-18-2009 @ 10:53AM
jolietjeff said...
The big problem with XM/Siruis is the price!! Yes MP3 players are nice I have a 6 disc one in my car but still listen to XM BUT I am on a 6 month $5.99 a month plan when that expires I will cancel because $12-$20 a month for Radio is ridiculous!! If they would lower their prices to $6 a month they would triple their subscribers but instead try and make a lot off the few listeners they have!! Their operating costs should be fairly low you can preprogram music and if DJ salaries are costly get RID OF THE DJs and TALK IDIOTs a computer can do their jobs for less!! LOWER THE PRICE AND MAKE MONEY THAT IS THE SOLUTION!!
9-18-2009 @ 11:07AM
kjkal10bach said...
XM was great merger sucks! I have 2 units and am still paying the fees for now. It's getting tough to hang in there!
Top tracks to Classic vinyl was tragic! Dusty needs to smoke another one a go take a nappy!
9-18-2009 @ 11:25AM
kaceysmith said...
I had an XM subscription back in 2001 when XM first came around. I kept the subscription up until very recently. My original payment was 5.99 a month, then it went up to 12.00, then 17.00, and the last bill I got was 21.99! Meanwhile the whole time more commercials were aired, DJ's became more prevalent ( very annoying), and prices went up, often without notice! I drove for an hour in the early morning to work and hated hearing "talk radio" so that was the whole reason for purchasing XM. Now that I spend less then 3 hrs a week in my car I've decided that the 21.99 is no longer worth the price. I would recommend to XM/Sirius to drastically lower your prices, get rid of the stupid DJ's ( who needs them when a computer can do the same thing without being annoying), offer a "low cost" subscription with *music only* for 6.99 a month and I will be back. I hung around for nearly 8 years, but after they raised my subscription price TWICE without telling me, I had enough. I realize that it is in the agreement that they can raise prices without notice, but just because it's written in small print does not make it right. Xm/Sirius has lost a long term customer who has been with XM since the beginning.
9-18-2009 @ 3:34PM
Brendan said...
Stop wasting money on what's practically free on local radio. Your best bet is to get a tape converter for your iPod or MP3 player and listen to music you're guaranteed to love. You can get them at Five Below. Best 5 dollars I have ever spent, driving has become infinitely more enjoyable
9-18-2009 @ 11:44AM
Brick Man said...
I canclled both my serious accounts 6 months ago. I could not get good clear recption anywhere. Not worth the money
9-18-2009 @ 12:38PM
jack said...
I have had XM for over 7 years. My favorite channel was "The Boneyard". After the merger, they used the Sirius Hairnation. When I started, I listened to both, and liked Boneyard better. After the merger, I will not renew, being that the Boneyard was reformated. When they bring back the Boneyard, to the orignial format, I might renew, until then, nope.
9-18-2009 @ 2:52PM
SHANE said...
I had it for a few months but $25.00 a month is too much money for radio.
9-18-2009 @ 12:47PM
pdl1 said...
Amen to JolietteJeff and Kaceysmith. Get rid of the high priced jocks and let us have good music. I would stick with it.
9-18-2009 @ 12:46PM
rrttrucking1 said...
I am a Trucker I have had Sirius for several years. When they merged I thought It was a good ideal but not the prices and I don't care for the talk shows only news and music and weather.They have to many commercials on the news for me. Yes when my plan is up I'll cancel also
9-18-2009 @ 1:07PM
gloria said...
SATELITE RADIO WAS JUST FINE UNTIL IT STARTED PAYING MILLIONS TO ALREADY GREEDY A$$ MILLIONAIRES LIKE RUSH,HOWARD,OPRAH,MARTHA....COME ON XM/SIRIUS FIGURE IT OUT....YOU WENT DOWN THE TUBE WHEN YOU OVER EXTENDED LIKE PAYING RUSH 45 MILLION A YEAR...WE WORKING CLASS PEOPLE ARE SICK OF GETTING SCREWED. IF THESE GUYS HAVE AN ADGENDA HELL LET THEM GO TO FREE TALK RADIO...FOR FREE???RIGHT!!! BUT PLEASE GIVE US OUR RADIO BACK!
9-18-2009 @ 1:23PM
tabasco628 said...
Gloria,
Rush is not on satelite radio. He is only of regular radio and his subscriber-only internet site.
9-18-2009 @ 1:28PM
rlipf said...
i ve had sirius for several years it is great you have to get the lifetime subscription no monthly bill to worry about.i had a unit stolen and they replaced for free.love sirius music news talk comedy sports whatever you want
9-18-2009 @ 1:43PM
gloria said...
Excuse me tabasco you are right about Rush...He is paid by the right wingers out there. But I still agree with many on here give us the option for just music...or sports..or talk? Let us pick a plan if not sirius is in big trouble.
9-18-2009 @ 7:01PM
richard varsalona said...
I can't believe all of the negativity about sirius.SAT RADIO is just coming out of it's infancy stage and it is a good product that will get better in the future.Everybody with a brain knows that the NAB with it's ties to the media has been trying to kill this service.I believe half of these complaints are contrived.Fully loaded cable tv service is at least 130 per month which is about 10 times more expensive and it is in how many households?Even the FCC screwed this company by taking over a year for an easy decision.There are much more serious things to complain about,how about our dysfunctional goverment for example.
9-20-2009 @ 6:38PM
SIRIUSALDO said...
I wish that you would have included in your post that
The company still has 6 months for a formal remedy and can probably figure out a way to get NASDAQ to grant another 6 month extension even come March. In order to be fare to your readers
I will humbly explain that if siri can go down from $ 2.85 to $0.05 in one year and $00.5 to $0.69 in 7 months it can certainly go from $0.69 to a $1.00 in one year, specially that Sirius xm is in much beter position than ever, and poised to be profitable for the first time by the end of this quarter.
02/29/08 841.71 M 3.38 2.80 3.22 2.85
03/31/08 894.82 M 3.89 2.65 2.82 2.85
04/30/08 579.17 M 2.92 2.36 2.90 2.57
05/30/08 449.27 M 2.88 2.52 2.58 2.52
06/30/08 735.63 M 2.75 1.80 2.55 1.92
07/31/08 1.18 B 2.75 1.49 1.97 1.60
08/29/08 1.64 B 1.60 1.26 1.60 1.33
09/30/08 1.35 B 1.40 0.57 1.34 0.57
10/31/08 1.39 B 0.69 0.215 0.6387 0.338
11/28/08 991.74 M 0.38 0.14 0.345 0.203
12/31/08 1.02 B 0.235 0.08 0.2212 0.12
01/30/09 615.26 M 0.15 0.10 0.123 0.12
03/31/09 1.37 B 0.43 0.1232 0.1495 0.35
04/30/09 1.18 B 0.6311 0.32 0.3302 0.3894
05/29/09 1.08 B 0.5549 0.30 0.3949 0.3495
06/30/09 1.40 B 0.48 0.30 0.3666 0.43
07/31/09 803.94 M 0.484 0.346 0.444 0.45
08/31/09 1.66 B 0.7796 0.46 0.463 0.6735
GOD BLESS AMERICA, AND PAY RADIO FOR THE FREEDOM OF CHOICE
Sincerely
Aldo