6

I'm not a very experienced investor, but I recently came across some publicly traded stocks, such as FTCH and NEGG, that have both failed to file their quarterly earnings reports. FTCH for a single quarter, whereas NEGG hasn't filed for two quarters.

Why are these stocks still publicly listed? Aren't they breaching some sort of requirement or something? Could anyone who is more experienced shed some light on why this is happening with these two companies, and where we can expect things to go from here?

1
  • 1
    What are the current share prices for those two companies? Is there anything in Google about them being in fiscal distress?
    – RonJohn
    Commented Dec 9, 2023 at 4:27

1 Answer 1

2

Failure to file a 10-Q report is not a serious violation of SEC regulations. Companies can fail to file these reports for a wide variety of reasons, and not all of them are within the company's control (maybe they are waiting for their third-party accounting partner to complete the attestation). Typically, a company has the ability to request an extension on the filing deadline with a valid explanation.

Continued failure to file doesn't automatically result in being delisted, either. The SEC will usually vary their process depending on an entity's record, and a first offense could just result in a warning letter or a fine. It's rare for a first offense to result in delisting or revocation, unless the SEC has reason to believe the company was engaged in fraud or something else extreme.

If you really wanted to get an answer, you could look through the SEC's Enforcement records for either of those companies to see if the SEC has taken action against them, if not, then I would assume they filed an extension.

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .