Oct. 9 (Bloomberg) -- The New York Stock Exchange may delist the most companies in five years for falling below standards or going bankrupt as the deepening credit crisis sends shares tumbling.

Lower stock prices mean more companies are in danger of breaching minimum share value rules. Yesterday, 22 stocks closed under $1 on the NYSE, including Circuit City Stores Inc., Vonage Holdings Corp. and Six Flags Inc. At the end of 2007, there was one, according to data compiled by Bloomberg.

On the Nasdaq Stock Market, 263 companies closed below $1 yesterday, compared with 53 at the end of last year. The exchange is seeking to lengthen the period a stock can trade below the limit before a delisting. Nasdaq stocks under $1 yesterday included Sirius XM Radio Inc. and Trump Entertainment Resorts Inc.

``You're now dealing with extremely high-profile companies,'' said Glenn Tyranski, senior vice president of financial compliance at NYSE Regulation Inc., referring to Lehman Brothers Holdings Inc., Bear Stearns Cos., Washington Mutual Inc. and IndyMac Bancorp Inc.

Nineteen NYSE companies were delisted in the first nine months of this year for slipping below compliance criteria, such as stock price and market capitalization, or bankruptcy, according to the exchange. If that pace continues, the total will reach at least 25 this year, the most since 2003.

The subprime mortgage crisis has robbed investors of confidence and contributed to the worst yearly slump in the Standard & Poor's 500 Index since 1937. Companies including newspaper publisher Sun-Times Media Group Inc. were removed from the NYSE for low share prices and market values, while Lehman and Washington Mutual went bankrupt.

`More Difficult'

Delisting makes it ``more difficult to buy and sell the stock,'' said Joel Hasbrouck, the Kenneth G. Langone professor of finance at New York University's Stern School of Business. ``After a company is delisted from the NYSE or Nasdaq, it usually trades on one of the much smaller and less liquid markets.''

The over-the-counter market is used for trading securities that aren't listed on a major exchange. Pink OTC Markets Inc., the provider of an electronic quotation and trading system in over-the-counter securities, now adds one or two new companies daily, compared with one about every two weeks a year ago, Chief Executive Officer Cromwell Coulson said.

``It's a terrible bear market and a lot of the traditional investors are getting hammered,'' Coulson said in an Oct. 7 telephone interview.

Average Closing Price

The NYSE requires companies to maintain an average closing price over 30 days of at least $1 and a minimum average market capitalization. Companies that were delisted this year often experienced rapidly declining share prices, according to Tyranski. Three were delisted for bankruptcy.

Some companies have struggled to obtain financing for daily operations, postponed capital expenditures and cut dividends as banks pull back on loans or make them expensive.

The NYSE lists 18 companies on its Web site that don't comply with listing standards, including Revlon Inc., the cosmetics maker controlled by billionaire financier Ronald Perelman, Westwood One Inc., the syndicator of programs to radio stations, and BearingPoint Inc., the computer consultant formerly known as KPMG Consulting Inc.

The broad drop in share prices prompted Nasdaq Chief Executive Officer Robert Greifeld to seek regulatory approval from the U.S. Securities and Exchange Commission to extend the time a stock can trade under $1 and remain listed on the exchange, he said Oct. 2.

`Advocacy Process'

``We have started the advocacy process with the commission,'' Greifeld said in a conference with issuers that was broadcast over the Internet.

The NYSE isn't considering changes to its continued listing standards, said Tyranski.

``We've never really done that,'' he said. ``We've worked through the rule process.''

The exchanges have some leeway when market conditions drive stocks lower, NYU's Hasbrouck said.

``Part of the uncertainty surrounding companies these days, particularly financial companies, is whether or not the factors that are driving their stock price down are systematic,'' Hasbrouck said. ``And also whether or not they're expected to be permanent.''

To contact the reporter on this story: Meg Tirrell in New York at mtirrell@bloomberg.net.

Last Updated: October 9, 2008 00:09 EDT