Please ensure Javascript is enabled for purposes of website accessibility

comScore Stock Sinks After Delisting Warning

By Timothy Green – Updated Feb 6, 2017 at 12:48PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The ongoing accounting review has dragged on, with the company at risk of having its shares delisted from the Nasdaq.

What happened

Shares of measurement company comScore (SCOR -3.87%) slumped on Monday after the company announced that it will be unable to regain compliance with reporting requirements. The Nasdaq Hearings Panel gave comScore until Feb. 23 to complete its ongoing audit process and restate earlier financial results, but the company now sees no way to meet that deadline. At 11 a.m. EST, the stock was down about 23%.

So what

comScore's long accounting saga began in February of last year when the company's board of directors were notified of potential accounting issues. An investigation was launched, but the company determined in June that more time was needed, missing its own self-imposed deadline.

comScore logo

Image source: comScore.

comScore will now need even more time to complete the process, although the company claims to have made significant progress. comScore pointed to the magnitude of work necessary to review its accounting judgements and estimates between 2013 and 2016 as the main reason for the delay. The company now expects to be done with the process by the summer, but it offered no assurances.

comScore's stock could potentially be suspended from trading and delisted from the Nasdaq if the hearings panel doesn't give the company more time to complete its review. In the case of suspension, shares of comScore would trade on the OTC markets.

Now what

comScore CEO Gian Fulgoni tried to sooth investors by talking up the company's strong fundamentals:

Although we are disappointed that we will not meet Nasdaq's deadline, we have made significant progress toward the restatement and in strengthening our internal audit and compliance functions. Furthermore, our business fundamentals continue to be strong, underscored by our healthy balance sheet with $116 million in cash. We are confident in our strategy, our roadmap for innovation, our unique data and technology assets, and in the value we deliver to more than 3,000 clients, all of which we believe will drive long-term growth for our Company.

Delays in comScore's accounting review are being taken by the market as a sign that the outcome of the review will be negative. It's still unclear how significant any restatements of prior results will be, and investors are going to need to wait months longer to find out.

Timothy Green has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

comScore, Inc. Stock Quote
comScore, Inc.
SCOR
$1.74 (-3.87%) $0.07

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
342%
 
S&P 500 Returns
107%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/30/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.