February 25, 2002

Homestore Resumes Trading With Flagged Ticker Symbol, But Nasdaq May Delist

Inman News Features

Trading in Homestore.com common stock resumed this morning on Nasdaq under the ticker symbol, HOMSE. The additional E on the end of the HOMS symbol indicates to investors that the company is not in compliance with Nasdaq rules that require Securities Exchange Commission reports be filed with Nasdaq on a timely basis. HOMSE was trading at 66 cents at 11:30 a.m. EST.

The noncompliance with the reporting requirements is a result of Homestore?s pending restatement of its financial results for the year 2000 and the first three quarters of 2001. The company has indicated its financial statements for those periods are unreliable.

Nasdaq reportedly has initiated proceedings to delist the company's stock pursuant to the timely reporting rule. The company can stay the process by requesting a hearing before a Nasdaq Listing Qualifications Panel.

Homestore said it will request a hearing next week and expects to comply with the rule by filing its restated financial statements before Nasdaq takes further action to delist the company's stock. The company previously said it expects to file restated financial statements by mid-March.

Homestore yesterday announced it had provided Nasdaq some additional estimates of its expected earnings restatements, but the numbers are still within ranges that amount to millions of dollars. The company said total revenue for the year ended Dec. 31, 2000, would be reduced by $39-$45 million and revenue for the first three quarters of 2001 would be reduced by $104-$113 million?higher than the company?s previous outside estimate of $95 million. Estimates of quarterly restatements have not been announced.

The company said the 2001 figures are comprised of an online advertising revenue overstatement of $76-$82 million and a non-advertising revenue overstatement of $28-$31 million, of which approximately $7-$23 million will be recorded as deferred revenue at Sept. 30, 2001, and may be recognized as revenue in future periods.

Copyright: Inman News Service

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