TranSwitch Corporation () recently announced its plan of voluntarily delisting its shares from Nasdaq, following its non-compliance related to the minimum closing bid price and stockholders’ equity requirements for sustained listing on the Nasdaq Capital Market. The company will file the voluntary delisting form – FORM 25 – with the Securities and Exchange Commission (SEC) on or about Aug 30 2013. The official delisting is expected to take place 10 days after this.
Earlier, in Dec 2012, the company had received a notice from Nasdaq intimating it about the failure to comply with the ‘Nasdaq Listing Rule 5550(a)(2)’, which requires stocks to maintain a minimum bid price of $1.00 per share on closing basis for 30 consecutive trading days.
Moreover, in Feb 2013, the company had received a follow-up letter from Nasdaq stating that it had failed to conform to the listing norms of maintaining a minimum of $2.5 million of stockholders’ equity. For full-year 2012, TranSwitch had stockholders’ equity of merely $1.23 million.
However, even during the 180-day notice period following the first letter, the company’s closing bid price failed to close at or above $1.00 for a minimum of 10 consecutive trading days. It was also unable to comply with the minimum requirement for stockholders’ equity.
In response to the delisting notice, TranSwitch had filed an appeal of determination with a Hearing Panel. After taking into consideration numerous factors such as its failure to comply with the listing norms, its poor financial position and lack of avenues for further financing, the company however later decided to delist its shares.
However, TranSwitch’s shares might be quoted in the OTCQB tier of Over The Counter (OTC) Markets, even after being delisted from Nasdaq.
TranSwitch provides innovative integrated circuit (IC) and intellectual property (IP) solutions, which help the customer and network infrastructure segment in delivering core functionality for video, voice and data communication equipments.
TranSwitch currently carries a Zacks Rank #3 (Hold). Better-placed stocks in the same industry that are worth considering include Advanced Semiconductor Engineering Inc. ((ASX - Snapshot Report)), ARM Holdings plc ((ARMH - Snapshot Report)) and Diodes Incorporated ((DIOD - Snapshot Report)). All of them have a Zacks Rank #2 (Buy).