NYSE Thinking About Chucking $1 Rule

The New York Stock Exchange is thinking about getting rid of the pesky rule that your company’s stock needs to trade above $1 for it to remain listed. [Yahoo! Finance] (Photo: woodendesigner)

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  1. lars2112 says:

    I wonder if the Citi stock price had anything to do with this.

  2. wardawg says:

    You can buy a lot of anything if it’s under a dollar, and in all honesty it can (almost) only go up from there. Any way to search for the lowest priced stocks currently on the market?

    • acklenheights says:

      @wardawg: If you don’t know what a stock screener is and how to use it, then you clearly don’t know the first thing about investing. Please take the time to learn a little about the stock market before you go lose it all.

    • JeffM says:

      @wardawg: And let’s face it- many companies that trade down to a dollar go bankrupt or perform a reverse split and head back down to single digits. Generally there is a reason that a stock price has gone down to that level.

      • Closed captioning provided by Homerjay says:

        @JeffM: Historically speaking you’re completely right, but we’re making history here. This really is a good idea.

        • Erwos says:

          @Closed captioning provided by Homerjay: No, buying stocks that are low because the companies have unsound futures is absolutely stupid. I’m all for investing, but if you don’t understand why stocks aren’t “cheap”, you shouldn’t be playing the game.

          • shepd says:

            @Erwos:

            Or, consider if you’re buying cheap it’s like playing the lottery, but with (somewhat) better odds. I’m certain out of 14 million (your odds on most lottos, some are worse) penny stocks, far more than 1 will survive to become a major corporation in the future. :)

          • Closed captioning provided by Homerjay says:

            @Erwos: I’ve made plenty on penny stocks over the years. My portfolio was down less than 10% in 2008. How was yours? Just because a stock is cheap doesn’t mean it will forever be cheap.

            • Erwos says:

              @Closed captioning provided by Homerjay: Fascinatingly enough, I lost zero money by keeping it in the bank instead of being stupid and playing the market. There is a serious risk that these companies could go out of business.

              My 401k? That’s down quite a lot, although I don’t exactly get to control where that money goes (for the most part).

              • Closed captioning provided by Homerjay says:

                @Erwos: Well thats what makes you different from the overwhelming majority of the people in the country. My 401K is down about 4% and I have about as much control over it as you do. Some of us just know how to invest. Others are too afraid to.

          • RedwoodFlyer says:

            @Erwos:

            Reminds me of all the people who bought Delta’s old stock when they were about to officially be bankrupt, which, of course, meant that the stock would zero out and all outstanding shares would void/worthless.

            I felt bad for the droves of commenters on various stock forums asking “so will they just redistribute the new shares to me etrade account or how does it work?”

  3. Snarkysnake says:

    “You can buy a lot of anything if it’s under a dollar, and in all honesty it can (almost) only go up from there. “

    Dude,why not buy a lottery ticket instead ? (the payout on state lotteries is bad ,true, but at around 45 cents on the dollar,it beats the crap out of these busted stocks)

    The fact is, most sub-buck stocks are headed for zero. The market is pretty efficient in sniffing out companies that have no real equity . In the vast majority of cases,the shareholders in these things are wiped out and their stock is cancelled.

    Please don’t take your hard earned money and throw it away tring to hit the quinella on Wall Street.

    • menty666 says:

      @Snarkysnake: In some cases the gamble can pay off. Like those folks that bought Sirius at 5 cents a share now doubled their money. I hope they have the good sense to take the short term gains tax hit and sell that stuff while they can make a few bucks.

      Others, like Charter, Vonage, etc may very well be doomed. An interesting thing… We’re a Charter area. Comcast has been running billboards on one of the corridors running through here, and there’s a “Comcast Spotlight” something or another here in town. It makes me think Charter’s pulling out soon.

      • Snarkysnake says:

        @menty666:

        Well, I sorta agree…But I’m talking mathematics here. Your odds on the legal lottery are still stratospheric compared to these situations. You would do well to note that Sirius is being manipulated by one of the best manipulators in the business (John Malone) for some reason other than their stunningly succesful business model. (Word is,he wants their satellites for his other businesses)

        Your point is correct : The price has doubled. But its a company that stockholders effectively have no control over because of its mountain of debt. Its still a penny stock and the ones holding it when they are wiped out will have…A handful of nothing.

        • menty666 says:

          @Snarkysnake: Trust me, I know it. Can you hear the cursing over the stock from here? :)

          • pb5000 says:

            @menty666: Menty666, what metro area are you in? Charter covers a lot of pockets in metro area’s but Comcast Spotlight is the advertising sales division of Comcast, chances are there is an agreement with Charter where Comcast Spotlight turnkeys the local advertising for Charter. That might explain the billboards?

  4. Modred189 says:

    Circuit City’s corpse hates you, NYSE.

  5. Trai_Dep says:

    Absurd. Reverse stock split would make an under one dollar stocks one dollar again.
    And if they can’t keep it there, perhaps they don’t deserve the placement.
    (shrug)
    Welcome to Capitalism.

    • Blueskylaw says:

      @Trai_Dep:
      Until you change the fundamentals, a reverse split would only bring the stock price up to a point where it could be shorted again, thereby bringing it back down to the pre-split level.

      • Trai_Dep says:

        @Blueskylaw: Sure, but won’t changing the NYSE rule similarly have no impact whatsoever to doomed company’s stock price? That’s what I was getting at.
        Good point though: symptoms shouldn’t be confused with cures.

        • Blueskylaw says:

          @Trai_Dep:

          It could help in some cases. Some funds are only allowed to hold stocks from certain exchanges, such as NYSE or NASDAQ.
          Thornburg Mortgage went from NYSE to the Pink Sheets which meant that basically most funds had to dump the stock, this would help drive the stock even further down.
          Similarly, a lot of funds can’t hold stocks under $5.00, so even if they were on the NYSE, funds would have to dump them.

          Tricky Situation.

  6. Corporate-Shill says:

    The rule has been the rule for so long and respectable companies have been delisted before, why change now?

    OH, I know why. So next week the rule can be changed so the price can be below 1 penny.

    Sorry, NYSE, screwing the pup on this one.

    Better idea, let the price tank to nothing so that I can buy up the assests for 1/1,000,00th of penny on the dollar.

  7. Grrrrrrr, now with two buns made of bacon. says:

    Well, they way stocks are heading, if they don’t rescind the $1 rule, there’s not going to be many companiesleft on the NYSE!

  8. kokuou says:

    Is it so hard to remember that there’s a space between “at” and “least”? Le sigh.

  9. parrotuya says:

    So they need a little breathing room for Citibank to fall? Maybe its time to short bank stocks! All the way down to 1 cent! DOWn, baby, DOWn!

  10. UniComp says:

    They have to do this, otherwise the list would just be a inch long

  11. Corporate_guy says:

    What happens if they are delisted? Does it make it harder to buy?

  12. lawnmowerdeth says:

    You’d think adjusted for inflation it should be a 10 dollar rule…

  13. mbgrabbe says:

    This should have been done a while ago. A stock’s dollar-value price is meaningless anyways. People should focus more on earnings per share, as that is much more indicative of the true value of a company.

    • Erwos says:

      @mbgrabbe: It’s not _meaningless_. These are stock exchanges. The whole point of an exchange is to set the price on something by providing a market for it. EPS is one factor in this pricing, but it’s just one component.

  14. savdavid says:

    A gambling chip is a gambling chip.

  15. redhelix says:

    Whoa whoa whoa

    I understand that there are lots of fairly stable companies that are being traded in the pink sheets right now – hell, I held shares in a few of them until my stop-losses all fired last October – but for every one of them there are a dozen that have been trading for 11 cents for years and can’t turn a profit. I’m leery of this.

  16. thebluepill says:

    NYPSE: New York Penny Stock Exchange

  17. craptastico says:

    it’s expensive to stay listed, that’s why they have that rule. there’s a lot of additional accounting/compliance costs that go along with being listed on the NYSE, and presumably if the stock is below a dollar, the company has better places to spend that money.

  18. tinyhands says:

    When I saw “NYSE” in the headline, my dyslexia kicked in and I read it as “NSFW”

  19. majortom1029 says:

    I think its a good idea to get rid of that rule. One stock that could benifit is six flags. Its trading around .25 or so . The thing is the amusement industry you wont know how well they are doing till atleast the summer . By then they will be delisted because there stock price is under a $1.

    To some companies I dont thin kthe dollar rule is fair.