Codere Online Stock Plunges as Auditor Resigns

Codere Online Stock Plunges as Auditor Resigns.

Costfoto / NurPhoto / Getty Images

Key Takeaways

Shares of Codere Online Luxembourg (NASDAQ: CDRO) tumbled Monday after the gaming company said its auditor resigned on Dec. 20, which could jeopardize the operator’s ability to retain its listing on the Nasdaq Stock Market.

CodereCodere Online highlighted at the Nasdaq market site. The stock tumbled today on news the company s auditor resigned. (Image: Twitter)

In late trading, shares of the online betting arm of Spanish gaming giant Codere are lower by 8.42% on volume that’s more than double the daily averge. A recent regulatory filing by the company indicates its auditor Marcum tendered its resignation because it could not establish completeness of the online gaming operator’s 2021-22 financial records due to the company’s relationships with third-party platform providers.

CDRO is now reliant on a successful NASDAQ appeal hearing with challenging time constraints even assuming CDRO is granted extension to 5/12/2025,” wrote Stifel analyst Jeffrey Stantial in a new report to clients.

In November, a delisting notification from Nasdaq. A hearing on that matter is schedule for Jan. 16 and as Stantial noted, the operator is attempting to fill the auditor vacancy in advance of the hearing.

Codere Potential Delisting Weighs on Stock

Confirming that the specter of delisting from the Nasdaq is weighing on the stock, shares of Codere Online are lower by 13.24% over the past week and 17.24% over the past month.

However, Codere Online is higher by 113.95% year-to-date, making it one of 2024’s best-performing gaming stocks. Stantial has a “buy” rating and $10 price target on the stock, implying potential upside of 58.9%. Delisting of stocks from major exchanges often occurs due to the shares such as $5 and $1, but that’s not the case with Codere Online as it resides around $6.30 at this writing.

Codere received the delisting notification from Nasdaq because the company isn’t in accordance with the exchange’s Listing Rule 5250(c)(1), also known as “the public reporting rule.” That places some burden on the company to swiftly find a new auditor.

“CDRO notes advanced discussions with replacement candidates, we expect likely targeting ahead of the 1/16/2025 appeal hearing, with parallel efforts to file the FY23 20-F and ensure smooth transition in auditor. Under NASDAQ policy, a successful extension would grant CDRO until 5/12/2025 to complete both FY23 FY24 F-20 filings,” adds Stantial.

Auditor Resignation Adds ‘Friction’ for Codere Online

The analyst acknowledged that could face “additional friction” due to Marcum’s resignation , but he also noted hope is not lost in terms of retaining the Nasdaq listing because the company has a strong operational track record.

“Hence, we remain somewhat optimistic CDRO will resolve the delayed filing by the requested 5/12/2025 extension date, though acknowledging the challenging time constraint and CDRO s limited control over auditor demands,” observed Stantial.

Losing its Nasdaq listing would be a blow to Codere Online because it would result in the $306.67 million company trading over-the-counter, which would likely diminish its pool of potential professional investors.

Article Sources
Las Vegas Raiders Release Chandler Jones After His Arrest — Report editorial policy.
  1. Harrah’s New Orleans Faces Civil Rights Complaint, Woman Refused Entry

Compare Accounts
×
Parking at MGM Properties in Las Vegas Raised Again
Provider
Name
Description
Pechanga Casino Scheduled to Reopen on June 1, Plan Focus On ‘Health and Safety’  Sands, Wynn Price Targets Lowered on Recent Macau Softness  Fanatics Sportsbook Inside FedExField Won’t Take Action During Home Games  Sacramento’s First Tribal Casino, Sky River, Now Open  Powerball, Mega Millions Jackpots Worth Estimated $764M, Highest During Pandemic  NCAA Launches Responsible Gaming Campaign During March Madness Basketball  US Gaming Industry Seeks White House Partnership in Addressing Digital Currencies  Illinois Gambling Operators Sue State Over Profit-Sharing Regulations  Illegal Gambling Machines Seized in Record Numbers by Colombia  DraftKings, FanDuel, PointsBet Refund Djokovic Bets After Stunning Default out of US Open