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Novell Faces Nasdaq Delisting
The possible removal of Novell common stock from trading is due to the company's late filing of quarterly results for the period ended July 31.
September 20, 2006
2 Min Read
Novell on Wednesday said the Nasdaq has notified the Linux distributor that it faces delisting from the stock exchange.
The possible removal of Novell common stock from trading is due to the company's late filing of quarterly results for the period ended July 31. Novell has delayed filing while it conducts an internal investigation in its stock compensation practices. Dozens of high-tech companies have come under scrutiny by the Securities and Exchange Commission for the way they accounted for stock options issued to employees as compensation.
Novell said it would appeal the delisting notice and request a hearing before a Nasdaq panel. As a result, the stock exchange has automatically stayed the delisting pending the panel's review.
Novell said it plans to file the quarterly report "as soon as practicable" after its audit committee completes is review of the company's handling of stock options.
The Waltham, Mass., software maker also disclosed on Wednesday that Wells Fargo Bank has notified the company that it's in default on a $600 million bond. Conditions for the bank-held bond required Novell to file quarterly reports. The bank gave the company 60 days to clear up the problem.
Novell, however, said it does not believe it is in default, saying the conditions of the bond requires the company to provide its quarterly report to the bondholder within 15 days of submitting the financial statement to the SEC.
Novell is one of many tech companies to receive similar notices from the Nasdaq for failing to file reports that have been delayed due to stock-option investigations. SEC Chairman Christopher Cox told a Senate panel this month that the agency is investigating more than 100 companies for possible fraudulent reporting of stock option grants.
The scandal centers on the practice of backdating stock options -- retroactively granting options on dates when a company's stock price is relatively low, maximizing the potential profits for the option holder.
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