Codere Online Fights Nasdaq Delisting Threat
Lift the suspension: Codere Online petition Nasdaq to reverse stock halt
Taking a stand on the delisting threat issued by The Nasdaq Stock Market, Codere Online, the digital betting arm of Codere Group, has appealed the decision and requested a hold on the stock suspension. The company, embroiled in a financial audit snafu, has submitted its case to Nasdaq and is seeking a hearing to argue its stance.
Missed Deadline, Prolonged Audit
On May 16, 2025, Codere Online received a staff determination letter from the Nasdaq Listing Qualification Department, potentially setting the company up for delisting because of the overdue Form 20-F submission. This annual report must be submitted by foreign private issuers under U.S. securities laws. However, Codere Online asserts that the delay is due to the finalization of the audit for the company's financial statements for the year, which is taking longer than expected due to a new accounting firm and delays caused by an old auditor exit.
In December 2024, Codere Online announced the parting of ways with its auditor, Marcum, due to significant IT and internal control deficiencies that hindered the completion of the audit. The firm cited these issues as severe enough to prevent the finalization of Codere's financial statements.
Internal Struggles
The departure of Marcum shed light on deeper issues within Codere Online, ranging from poor accounting practices to lax internal controls and questionable cybersecurity. These issues were primarily associated with internal control problems from 2021 and 2022, reflecting the challenges the company faces in maintaining financial transparency and control.
During its previous appeal against delisting, Codere Online claimed that it was quickly addressing the submission of its delayed Form 20-F for 2023.
The Hearing
In response to Nasdaq's letter, Codere Online has requested a formal hearing to challenge the delisting determination. This move will allow the company to present its case and explain the legitimate reasons behind the delay. Codere Online has also applied for a stay — a legal pause — on the trading suspension. If granted, this would enable Codere Online shares to keep trading until the hearing ends. In its effort to persuade Nasdaq, the company has presented relevant documents to justify its requests.
Brisk Q1 Results, Dark Clouds Ahead
While Codere Online works diligently to complete and submit Form 20-F, if all goes well, the company should be able to file the form by May 30, 2025. If Nasdaq refuses to grant a further stay for Codere Online's securities, trading could be suspended starting June 6, 2025. On May 16, Codere Online unveiled strong first quarter results, with total revenue of €54.3 million and net gaming revenue of €57.0 million, marking an 8% increase year-on-year.
However, the prospect of possible delisting looms large, casting a shadow over Codere Online's otherwise impressive performance. Stay tuned as this saga unfolds.
- Despite the strong performance in Q1, with total revenue of €54.3 million and net gaming revenue of €57.0 million, technology challenges and internal control issues have caused delays in the submission of Form 20-F, potentially threatening the sports industry as Codere Online may face delisting.
- In an attempt to maintain trading and avoid delisting, Codere Online has requested a hearing to address the delay in submitting Form 20-F and has applied for a stay, citing technology difficulties and internal control problems as the reasons for the delay, all while striving to align with the regulations in both technology and sports sectors.
