Controversial Unix vendor SCO has six months to get its share price trading above $1 for a sustained period or it will be delisted from the Nasdaq stock exchange.
The Lindon, Utah-based company, which is best known for its legal case against IBM these days, has been trading below $1 since March 13. It now has until October 22 to get above $1 for 10 consecutive days, according to a Securities and Exchange Commission filing.
The delisting notice marks a new low for SCO’s share price following a spectacular rise driven by its breach of contract and copyright claims against IBM and slander of title claim against Novell.
Commencing in March 2003, SCO’s legal claims pushed the company’s share price to a high of $20.85 in October 2003 before a series of damaging legal decisions pushed the price downwards.
SCO’s share price plunged below $1 in December 2006 after US District Judge Dale Kimball affirmed an earlier ruling limiting the SCO’s claims against IBM to just 106 items of evidence. Just days later Novell filed a request for a partial summary judgment that could cripple SCO’s already diminished breach of contract and copyright case against IBM.
The share price recovered quickly but stayed just above $1 before the dip on March 13. SCO has managed to reduce its legal costs via a fee limitation agreement but it has struggled to inject any life into its core Unix operating system revenue.
For the first quarter ended January 31 SCO reported a net loss of $1.0m on revenue of $6.0m, compared to a loss of $4.6m on revenue of $7.4m the previous year.
If the company cannot demonstrate compliance with Nasdaq rules by October 22, Nasdaq staff will determine whether it is able to meet the initial listing requirements of the stock exchange. If so, it will be given an extra 180 days to get its share price above $1, if not, it will be delisted.
The company avoided having its stock delisted from the Nasdaq SmallCap market in April 2005 after it filed annual and quarterly financial reports that had been delayed due to problems related to the accounting of equity compensation.