NEW YORK -- October 17, 2008: Sirius XM radio said in a filing with the Securities and Exchange Commission Thursday that it it seeking shareholders' approval to declare a reverse stock split, with a ratio of between 1-for-10 and 1-for-50.
In a reverse stock split, shares are combined to bring up their value. SIRI shares were at 37 cents in Friday-afternoon trading; a 1-for-10 reverse split would combine 10 shares into a single share worth $3.70.
A reverse split could help Sirius XM avoid delisting from the Nasdaq exchange; the company said in its SEC filing, "Although our common stock's trading price has not been below the $1 per share level for 30 consecutive trading days (the length of time the trading price would need need to be below the minimum trading price before the Nasdaq Global Select Market could initiate delisting procedures), we believe that approval of this proposal would significantly reduce our risk of not meeting this continued listing standard in the future."
Sirius is also asking shareholders to give their permission for it to issue more stock, allowing up to 8 billion shares, up from the currently authorized 4.5 billion.