Codere Online Stock Plunges as Auditor Resigns

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.

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, Codere Online said it’s appealing 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.

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 Codere Online 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.