If you're a penny-stock speculator, having your stock delisted comes with the territory. However, August proved to be a cruel month for more mainstream investors. Folks who bought into Cheesecake Factory
A participant in the Rule Breakers newsletter service's discussion board posted some concerns over a similar notice that CNET Networks
Is it time to panic? Not exactly. Keep in mind that being delisted is not a treat. It's like being kicked out of your adult seat at Thanksgiving dinner and having to sit at the kiddie table. Yes, you will still get fed, but it's a messy place to be, the conversations are wacky, and the view is pathetic.
However, the wide net of the options-backdating scandal found some pretty big names unable to file their quarterly financials before their mid-August deadlines. That has landed otherwise respectable companies, such as Marvell Technology
They are dreadful in the sense that the delisting warning usually hits unpopular companies that have fallen below certain minimum requirements. More often than not, that's the point of no return for fading speculative issues. It's different this time, though. These are big names we're talking about, and they have some pretty impressive company in the holding cell.
Investors have been taking the announcements in stride. Some companies, including VeriSign
So be patient. There are plenty of good reasons to dislike the companies that have been tainted by backdating accusations. You will likely see a fair number of CFOs, compensation-committee members, and high-ranking executives booted by the time the dust settles. Just don't panic over the delisting notices themselves. The ultimately filed financials and the state of corporate ethics should be the greater concerns.
CNET is an active recommendation in theRule Breakersgrowth stock newsletter service.
Longtime Fool contributor Rick Munarriz is a fan of CNET, but of the companies mentioned in this story, he owns shares of only Cheesecake Factory. He is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.The Fool has a disclosure policy.
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