Broadcom Granted Continued Nasdaq Listing

By Colleen Taylor -- Electronic News, 11/3/2006

In a rare bit of stock-related good news for the beleaguered Broadcom Corp. and its shareholders, the company today announced that a Nasdaq listing qualifications panel has granted the company's request for continued listing of its Class A common stock on the Nasdaq global select market.

Broadcom had been threatened with delisting as a result of the company's failure to file its quarterly report on Form Q to the Securities and Exchange Commission (SEC) by the SEC's deadline. The filing was held up by an internal investigation of Broadcom's stock options granting practices that turned up evidence that the company participated in the now-notorious practice of backdating. Broadcom has said that the company's financial statements for the years 2000 through 2005 and for Q1 2006 will need to be restated, and the company will incur a whopping $1.5 billion, at least, in additional non-cash stock-based compensation expenses.

Broadcom has been mired in the industry-wide stock options controversy for months. The company came under investigation by the SEC in June after Merrill Lynch identified Broadcom as one of six companies that it noticed had displayed suspicious stock options grants and pricing.

Broadcom is not alone in getting in the good graces of the Nasdaq's listing qualifications panel after a delisting threat from the market. Altera Corp. and Apple Computer Inc. have been granted continued listing on the market in spite of stock options investigation-related SEC filing delays that prompted Nasdaq's warnings.

Nasdaq's ruling didn't come without guidelines. Broadcom's continued listing is subject to the following conditions: on or before January 7, 2007, the company must submit additional information to Nasdaq regarding the company's internal review of its historical equity award practices and related accounting; and on or before January 31, 2007, the company must file with the SEC its delayed Q2 quarterly report on Form 10-Q, and all necessary restatements of its prior financial statements.  

Should Broadcom be unable to meet these deadlines, "there can be no assurance" that Nasdaq will grant an additional extension of time to meet such conditions or that the company's Class A common stock will remain listed on the Nasdaq market, according to a statement from the company.

Yesterday, Germany-based Dialog Semiconductor plc announced it would voluntarily delist its stock from the Nasdaq market, due to what the company cited as the increasing regulatory burdens of trading in the United States exchange.