Nasdaq may delist late filers

NEW YORK – Will Nasdaq really delist Apple Computer Inc.?

Apple and more than a dozen other companies have been warned by Nasdaq of possible delisting because they are late filing their quarterly reports as the companies untangle their options accounting.

Delisting is a scary prospect for shareholders. Delisted stocks from viable public companies don’t disappear; they move, either trading on the OTC Bulletin Board, or having their prices quoted on unregulated Pink Sheets, which were once printed on pink paper.

Once stocks are off the major exchanges, they’re usually much less liquid. That, in turn, more than triples the spread between a stock’s asking price and its selling price, according to research led by Georgetown University professor James J. Angel. A larger “bid-ask” spread makes a stock more expensive to buy and cheaper to sell, cutting into an investor’s profits.

“Shareholders in our sample experience a wealth-loss of 19 percent on average due to delisting,” Angel wrote.

That’s why delisting a stock “is adding an additional problem for investors beyond the substantive problems going on in the company,” said Jonathan Macey, the deputy dean of Yale Law School and a professor of securities law. “It’s adding insult to injury.”

But, barring indictments, experts say it’s unlikely the companies that have been warned will all be delisted.