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You'll get delisted from the NYSE if you fall below $1/share or below a certain market cap for more than 30 consecutive trading days.

Being delisted is generally a very bad sign, and it becomes much harder for shares to get traded.

This is correct. To add to this, you will sometimes see companies attempt to avoid delisting by reverse stock splits (e.g., 10 old shares become 1 new share).

You can only bid up to a cent difference. So if every new bid changes the entire valuation of your company by at least 1% then it becomes very volatile.

The tick size for stocks less than $1 is $0.0001.

Not a stock market expert by any means, but human psychology has a major impact here. That’s why stocks tend to find floors/ceilings at nice round numbers like multiples of ten or whatever. Likewise to a machine a number is a number but to a human who’s evaluating the stock, seeing something less than $1 is a red flag. Someone please correct me if I’m off!

The primary reason is $1 is the delisting threshold.