The rule was suspended as the stock markets fell last year. Now that a rally has given stocks a boost, the exchanges are ready to put the rule back in place, although nearly 200 companies could find themselves expelled from their stock market, USA Today reported Monday.
"We wanted investors to take a collective breath. But ... the market has come back and it was time to restart the rule," NYSE Senior Vice President Glenn Tyranski told USA Today.
"When the market was crazy, stock prices didn't reflect reality. With stocks going back to normal, it's back to normal with rules and regulations," Maureen O'Hara, a finance professor at Cornell University, said to the newspaper.
Fortunately, "there's time to get things worked out," said Jones Soda Chief Executive Officer Jonathan Ricci, recipient of a warning letter.
In the first place, the rule applies for stocks that fall top less than $1 a share for more than 30 consecutive days. Second, it usually takes six months or more for a de-listing process.
Companies can also execute a reverse split to quickly restore value to their stocks, the newspaper said.