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New York Stock Exchange Issues Warning to JCPenney

Wall StreetJCPenney got another piece of bad news last week when the New York Stock Exchange notified the retailer that its stock would be delisted if it doesn’t manage to raise share prices above $1 apiece in the next six months. Now JCPenney is mulling a reverse stock split, in which the number of shares on the market is decreased and the price per share rises. To do this, the department store chain first needs shareholder approval.

If a company is delisted, its shares can still be traded off from the exchange, in what is known as “over-the-counter” trades. But it becomes far more difficult for investors to buy and sell shares and many institutional investors, such as pension plans, have rules against holding delisted shares. That is why major companies almost never allow their shares to be delisted short of going bankrupt.

Read the full story at CNN.