More struggling companies delisted from Nasdaq, NYSE

— -- Some companies aren't just seeing their credit dry up. Now they're losing their ticker symbols.

In the latest strain on companies already struggling to borrow, a swelling number are being delisted from stock exchanges. This is taking the capital drought to a new level, because delisted companies may have even more trouble raising money. "It's a reflection of the times," says Richard Cripps of Stifel Nicolaus. "Companies aren't getting capital."

This year, the New York Stock Exchange and Nasdaq Stock Market have delisted 129 companies for violating listing standards, the highest number since 226 in 2003. That number is likely to swell when the Nasdaq reinstates its rule that companies maintain a stock price of at least $1 over 30 trading days. Nasdaq is expected to announce as soon as today that it is extending the suspension of its $1 rule three months to April 20, 2009. It was suspended this year as the market went into free fall.

The threat of delisting could potentially put companies in an even tougher spot because it:

•Turns the falling stock into a real business peril. Companies with share prices below $1 aren't automatically delisted, but it starts the process. There are 548 companies on the Nasdaq and NYSE with stock prices less than $1, says Standard & Poor's Capital IQ. That's up from 69 in 2007 and the highest number on record since at least 1999.

•Adds another complication for individual companies. Sirius XM siri, for instance, has had a share price below $1 for three months and faces roughly $1 billion in debt coming due in 2009.

The satellite radio company sought to head off a delisting Thursday by approving a plan to sell 3.5 billion new shares and then do a reverse stock split of up to a 50-to-1 ratio, which will boost the share price by reducing the shares outstanding. Sirius has a market value of about $500 million, so a reverse split can stave off delisting. That option won't work for companies with smaller market values. Thursday, for instance, the NYSE said it would delist Imperial Capital Bancorp imp because its market value had fallen below $25 million.

•Magnify credit market constriction. Companies with lower credit ratings are already facing record borrowing costs, with yields on junk bonds 20.72 percentage points higher than government debt with similar maturities, according to Merrill Lynch. That's more than twice the spread considered a sign of credit stress. "This is what happens in a bad economic time," says Doug Sandler of Riverfront Investment. "Companies living on the fringe aren't staying in the water."