More Woes for Homestore; Nasdaq Threatens DelistingEmbattled Homestore.com Inc. said Friday it has received notice that Nasdaq has begun the delisting process because Homestore is out of compliance with a rule that requires timely and accurate filing of statements.
The announcement followed one made the day before in which Homestore, Westlake Village, CA, said that accounting errors the company has been working to untangle may be larger than once thought and are not confined to its advertising revenue as originally reported.
Homestore in January said it overstated advertising revenue from January to September 2001 by $54 million to $95 million, according to preliminary results of an internal accounting audit. At that time, it also said that it would restate its earnings for the first nine months of the year and that it might have to restate its earnings for 2000 as well.
Last week, Homestore said it will reduce its revenue for 2000 by $39 million to $45 million.
And while the company narrowed its original estimation of overstated advertising revenue for the first three quarters of 2001 from between $54 million and $95 million to between $76 million and $82 million, Homestore said its internal audit has shown that non-advertising revenue has been overstated by $28 million to $31 million for that period. However, Homestore said, $7 million to $23 million of the non-advertising revenue, primarily in software and services, may be booked as deferred revenue for future periods.
Homestore claimed in Friday's statement that it will have its records in order in time to avoid delisting by Nasdaq.
The company's stock began trading again Feb. 22 after having been halted Feb. 12 pending more information from the accounting audit. It closed Friday at 85 cents after opening at 70 cents, down from a 52-week high of $37.25.
Earlier this month, Homestore said it would cut 300 jobs in the first quarter of this year and that it sold its eNeighborhoods business unit to an unidentified buyer.