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SCO Stock In Danger of Delisting, Again
hweimer writes "In 2005, SCO got into delisting trouble because they failed to file their annual 10-K report in a timely manner. SCO seems to be headed the same way again for a different reason: the stock price is too low to meet Nasdaq's requirements. Quoting: '[W]hat can a company do to boost its share price? Besides stopping to burn money and come up with a working business model, I mean.'"
The NASDAQ disallows this as a means to get your stock price back over $1. You can do it, but it won't get you off of their delisting list.
"[W]hat can a company do to boost its share price? Besides stopping to burn money and come up with a working business model, I mean."
Well, how about a reverse stock split?
"Reverse stock split [...] a reduction in number of shares and an accompanying increase in the share price. The ratio is also reversed: 1-for-2, or 1-for-3."
Of course, the company wouldn't become worth any more money, but the share price would go up.
"Goodness me, how unlike the FBI to abuse the trust of the American public." -- The Onion
LinuxWatch has an article by Steven Vaughn-Nichols about the March 2007 SCO conference call reporting their quarterly financials. They're doing a bit better, due to cost-cutting, but they still show no evidence of having a real business. I suppose they could do a 1:50 reverse stock split ...
Groklaw has some legal eagles who can give you better answers than I can.
My guess is that unless they can "pierce the corporate veil" they'll be stuck in line with other unsecured creditors.
If they can pierce it then they can go after executives and maybe even the law firms or the individual lawyers. Even if they don't recover much, if the lawyers wind up holding the bag it will send a message to corporate land sharks everywhere: Don't participate in bogus lawsuits.
If you just want to punish the landsharks:
The judge can also sanction the lawyers directly, with the fines going to the court. Likewise, non-insider SCO shareholders who bought in before the suits were filed may have action against the lawyers for malpractice. Then there's the Utah bar association.....
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
just to tie things together. html?month=04&day=25&year=2007&hour=16&min=00&sec= 00&p0=179
http://www.timeanddate.com/counters/customcounter
gives you a countdown to "Hells Bells" at this point they need to
A get above $1.00 for 10 days
B maintain the other requirements
C fight an Armageddon level filing (the constructive trust filing by Novell)
IF ABC does fails Then TSCOG is D E A D (in full monty python flying circus fashion )
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As amusing as it is, it wouldn't work. The SEC has recently started halting trades on any company mentioned in such spam emails. I don't remember for how long exactly, but the hold is something like a week. Which means that such spam will most likely do more damage than good.
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http://it.slashdot.org/article.pl?sid=07/03/09/02
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There are still enough shares outstanding in the public float for a few more reverse splits. 2:1 reverse would take price to $1.88 leaving approximately 7.8 million public shares; 3:1 reverse to $2.82 and 5.6 million pubilc shares; 4:1 reverse to $3.76 and 3.9 million shares. For the requirements listed on page 14 of listing requirements (http://www.nasdaq.com/about/nasdaq_listing_req_fe es.pdf - PDF warning) the first is only being met with stockholder's equity (which is about $8 million). The second and third (publicly-held shares and market value of said shares) are in no danger of dropping below listing requirements. SCOX shouldn't be in danger of being delisted but their only option may be a reverse split since a buyback would not only drain cash reserves but also lower shareholder equity, which must be at a minimum of $2.5 million or else the stock gets a delisting notice yet again.
I think his issue is that the poster didn't disclose that it was his own content, and even said "Quoting:" which at least implicitly infers that he just happened across the content, not that he'd written it. Disclosure = a fairly good rule of ethics for "journalists" (although the "blogosphere" (gack) is pretty good at being selective about when they want to categorize themselves as journalists).
Aside from rules compliance, and paying the annual listing fee, NASDAQ has three basic rules about staying listed:
- Minimum share price of $1
- at least 750k public shares
- at least $5m market value.
If they fall out of compliance for 30 straight days (and they last traded for $1 on March 13), they get a delinquency notice and have 90 days to get it together. Their ticker symbol will probably change from "SCOX" to "SCOXE" while they're under threat of delisting. [Source]SCO already did a 1:4 split back in 2002; I'm not sure how the exchange will feel about them doing it again, because had they not done that split, their share price would currently be less than a quarter.
This is not my sandwich.
Something that most people seem to be missing is that, according to Investopedia, the 30-days-below-one-dollar rule means 30 business days and it isn't just the closing price, if the stock trades above $1 in intraday trading, that's enough to satisfy the rule.
As of market closing today, they've traded below $1 for 21 consecutive business days. That means they have almost two full weeks before they could hit that 30-day trigger. The stock has been climbing slowly the last few days and there's at least some chance the interested parties will successfully paint it over $1 before it's too late.
If April 27th arrives and they haven't made it over a dollar, though, a reverse-split is probably their only hope (barring some magical court rulings in their favor) since the stigma of receiving that warning could shake what little confidence investors have left making it all but impossible to get over a buck for the ten consecutive days required.