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Mercury nudged off the NASDAQ
The firm hand of compliance
Mercury Interactive is being de-listed from the Nasdaq after missing a second deadline for restating its financials in the wake of a company share-trading scandal.
Shares in the business technology optimization (BTO) specialist will be removed from Nasdaq at the opening of business on Wednesday morning, Mercury announced on Tuesday.
De-listing follows the resignation of the company's chief executive, chief financial officer and general counsel in November following an investigation initiated by the US Securities & Exchange Commission (SEC) found improper allocations of Mercury stock to employees over a 10-year period.
Mercury faced de-listing on November 30 after its third-quarter results were delayed so management could determine the impact of misdated stock allocations on financial statements spanning 1998, 1999 and 2001. The Nasdaq, however, granted Mercury an extension until January 3 to file its amended returns and meet its requirements for trading.
Shares in the company - which specializes in software that helps publicly traded companies achieve compliance with government regulation, such as Sarbanes Oxley - will now move to the Pink Sheets. The Pink Sheets is a service specializing in quotes for small, emerging, closely held, non-US and "economically distressed" companies.
De-listing is a further blow to Mercury's prestige. In 2004, the company stated its goal was to become one of the world's top-five software companies within five years - joining the ranks of Microsoft, Oracle and SAP - and predicted that success in 2005 would play a major part in achieving this objective.
One large Mercury partner told The Register he was "disappointed" in Mercury over the share incident. There is speculation that a weakened position could leave Mercury open to a low-ball acquisition in what is generally accepted to be a profitable market of software optimization and regulatory compliance.
Mercury has not set a date for when it expects its financials to be in order or when it will apply for re-admittance to Nasdaq. In a statement, Mercury said it is: "Committed to regaining compliance with all Nasdaq filing requirements and obtaining relisting of its common stock on Nasdaq in a timely manner."®