Covad receives Nasdaq delisting notice

Covad said Friday it received notice from the Nasdaq stock market that it does not meet minimum net tangible asset and shareholder equity requirements for continued listing.

According to a Nasdaq spokesman, companies are required to have least $4 million in net tangible assets and market value of publicly held shares must be at least $15 million. The spokesman declined comment on specifics concerning Covad.

Nasdaq said companies that receive a delisting notice have seven days to request a hearing to challenge the decision, a move that generally stays delisting action. Failure to request a hearing results in automatic delisting.

In a statement last week, the struggling independent DSL-provider said it intends to request a hearing to review the delisting notice. Chairman Chuck McMinn said the company would seek to convince Nasdaq with its first quarter earnings results and funding outlook that it would satisfy listing requirements soon.

“We are examining all options to maintain our listing,” McMinn said.

Covad also announced Friday it would delay first-quarter 2001 earnings until the week of June 18. The first glimpse into Covad’s 2001 financials comes shortly after the company reported wince-eliciting net losses for 2000 of $1.4 billion and a fourth-quarter 2000 net loss of $907.5 million on May 24.

The company originally scheduled its year-end and fourth quarter 2000 earnings call for Feb 27.

In April, Covad released first-quarter 2001 operating statistics, saying it had 319,000 total lines in service and that customer orders were soaring as stranded NorthPoint Communications customers sought DSL-refuge via Covad’s Safety Net program.

Normally trading under the ticker symbol COVD, the company earned a COVDE tag in April, a fiduciary scarlet letter reserved for companies with late SEC filings.

In late-day trading today, shares were down 6.8% to 96 cents per share. Companies that trade below $1 per share for 30 days are also subject to delisting.