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).

Ever since Circuit City Stores (NYSE: CC) CEO Philip J. Schoonover sliced 3,400 sales people in March 2007 to save money, I have questioned the savvy of its management. That's because many of those fired sales people took their customers over to Best Buy (NYSE: BBY). As its stock lost 86% of its value, I was surprised that anyone would make a bid for it.

Yet Blockbuster (NYSE: BBI), the struggling video store chain, decided to buy. I don't know what got into Blockbuster's head to make it think that combining two struggling companies would make an agile competitor. The Richmond Times reports that it wanted to create a one-stop shop for movies, games, and electronic equipment. But that dream died when Blockbuster pulled its $1.3 billion offer after reviewing Circuit City's books.

Carl Icahn has said he would buy Circuit City. But it's losing money -- $164.8 million, or $1 a share, in its fiscal first quarter. This was $100 million more than its Q1 2007 loss. And Blockbuster's conclusion after a closer look at its financial statements does not bode well for Circuit City's future. Circuit City stock is down 7.8% in pre-market. Let's see whether any new bidders emerge.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.

Netflix, Inc.'s (NASDAQ: NFLX) continues to be the dominant DVD rental company in the U.S. when it comes to rentals by mail, but the U.S. Post Office is probably not happy about it. Why? The adhesive on Netflix's return mailers keeps jamming its automated mail sorting machines, causing costly manual sorting of the Netflix envelopes.

That sounds like a small problem, but considering Netflix has seven million customers and is sending and receiving hundreds of thousands of DVDs every month, the need to manually sort all those special DVD envelopes is costing the USPS an estimated $21 million in labor costs per year. Don't think for a second that the federal mail agency is not about to place a surcharge on every Netflix mailer sent through its national network.

Want numbers? Citigroup analyst Tony Wible estimates that a surcharge could change the monthly operating income per Netflix subscriber from an existing $1.05 to $0.35. That's a 66% drop based on faulty mailers alone. Competitor Blockbuster, Inc. (NYSE: BBI) studied this issue before it became one for them, so that company is not experiencing a similar problem.

It's hard to imagine that a simple adhesive is creating such a mess for Netflix, but it is. Going back to the envelope drawing board may be the only solution (from what I have seen, Netflix envelopes have not changed in years). Until then, this problem will be hanging over the company's head, and it's financial prospects in the next few quarters and beyond.

Blockbuster Inc's (NYSE:BBI) attempt to compete with online-only DVD renter Netflix Inc. (NASDAQ:NFLX) has taken yet another turn. The once popular video merchant will now let its "Total Access" subscribers return a DVD rented online to a Blockbuster store.

While this specific program is not earth shattering, it will give online DVD renters who are Blockbuster subscribers a little more flexibility on how they return videos. While I am not so sure that anything can beat Netflix's "drop in any mailbox" feature, the online Blockbuster system immediately gears up the next movie in the subscriber's queue for shipment once a video rented online is returned to a store.

Thus the time it takes a Blockbuster subscriber to receive fresh DVDs in the mail is reduced. Netflix subscribers have to wait until videos are returned by mail to have new selections in their queues sent to them, which introduces more lag and wait time. Will Blockbuster's attempt at cutting the wait time compared to competition from Netflix actually help its DVD rental business? Nobody knows, but previous attempts at taking on Netflix have fallen flat. Even Wal-Mart Stores, Inc. (NYSE:WMT) got out of the online DVD rental business, as it was unable to beat Netflix at its own game.