Nasdaq planning to delist Homestore
The real estate site says the Nasdaq is taking steps to delist the stock because the company violated the market's rules. Homestore plans to request a hearing.
Homestore said Friday that the Nasdaq is taking steps to delist its stock because it violated the market's rules. The violations revolve around Homestore's recent admissions to overstating revenue in 2000 and 2001.
Homestore said it plans next week to request a hearing with the Nasdaq to discuss the issue and said it plans to comply with the Nasdaq's rules before the market takes any more steps to delist the stock.
A Homestore representative said the company was notified by the Nasdaq of the potential delisting on Thursday, but declined to comment further.
The Nasdaq has notified investors that Homestore is not current with its regulatory filings by appending an "E" to its ticker symbol, marketplace spokesman Wayne Lee said. While declining to comment on the specifics of Homestore's case, Lee confirmed that a violation of Nasdaq's rules could result in Nasdaq delisting a company's stock.
"Nasdaq goes all out to maintain integrity in the marketplace and protect investors and their interest," Lee said. "That's why we have this rule and other rules in place."
Nasdaq, which halted trading in Homestore shares on Feb. 13, after Homestore acknowledged that it would have to restate its 2000 revenue, allowed the company's shares to resume trading Friday. Trading under its revised ticker symbol, "HOMSE," Homestore shares were down 3 cents in afternoon trading to 71 cents. The company's shares have fallen by 97 percent during the last six months.
The move to delist Homestore's stock comes after Homestore's announcement Thursday that it overstated revenue in 2000 by at least 17 percent and the amount by which it overstated its 2001 revenue was greater than previously announced.
Once considered one of the premier e-commerce companies, Homestore has seen its reputation fall into ruin in recent months. Since last fall, the company has warned of a revenue shortfall, gone through two rounds of layoffs and a management shake-up.
Homestore's financial problems have led Cendant, one of its investors, to take a $285 million after-tax charge, and have led some of its real estate customers to abandon their exclusive relationships with the company.