Dell: Immune From Delisting

Well, I was wrong. A couple of weeks ago, when the Nasdaq gave Dell an extension rather than forcing the computer company to delist, I said that if Dell hadn't filed the required reports by July 16, it would "simply get another extension". What was I thinking? Of course it didn't. Instead, the Nasdaq board has simply decided that Dell shares can continue to trade on their exchange indefinitely, despite the fact that it hasn't filed its past four quarterly reports, or its annual report.

You might consider this to be self-interested spinelessness on the part of the Nasdaq – after all, what's the point of reporting rules, if you waive them the minute they're broken? You might also consider this to be a case for the SEC to look into, since the SEC does nominally regulate the Nasdaq – a point made by a commenter on my earlier post. That comment was followed up by one from The Panelist's David Neubert:

Nasdaq would have a hard time dealing with the reduction in revenue from losing the 20 million shares a day volume from Dell. As a for profit public company why would NASDAQ actually care about the public trust? They aren't a regulator anymore. Oh, I'm sorry they do have some regulatory responsibility. . . . (can you say henhouse or fox?)

It seems that there's a double standard at Nasdaq (and, I suspect, at the NYSE as well). If a company is relatively small – small enough that its volume doesn't contribute significantly to the exchange's bottom line – then the exchange will be tough. On the other hand, if the company in question has a large float of shares outstanding, it has de facto impunity when it comes to listing requirements and the like.