U.S. Securities and Exchange Commission (SEC) reporting rules that govern listed companies are too much for Creative Technology Ltd., which has renewed plans to delist its shares from the Nasdaq stock exchange.
"The administrative overhead and cost of the evolving and increasingly burdensome U.S. reporting obligations has become significant," the company said Thursday, announcing plans to end its U.S. listing on Aug. 1. Less than 10 percent of Creative's trading volume takes place on Nasdaq, it said.
"Creative believes the costs of maintaining its Nasdaq listing and continuing with its U.S. reporting obligations are no longer in the best interest of the company and its shareholders," it said.
Creative's shares will continue to be traded on the Singapore stock exchange, Singapore Exchange Ltd.
Creative, which makes MP3 players and PC sound boards, has been down this road before. In 2003, Creative announced similar plans, saying the volume of shares traded in the U.S. was low and most analysts that cover the company are based in Singapore, where its headquarters are located. The delisting plans were announced then also held out the possibility of reducing the company's administrative overhead and cutting costs.
"We believe it is in our shareholders' best interest that we initiate steps that can facilitate the elimination of our SEC reporting obligations and our intended delisting from Nasdaq," the company said at that time.
The 2003 delisting plans were never realized. Whether or not Creative proceeds with its delisting plans this time remains to be seen. The company announced plans to file a formal delisting notice with the SEC on July 23, but reserved the right to delay or withdraw the filing for any reason. Once the filing has been submitted, Creative's shares can be delisted within 10 days.
Assuming Creative goes through with its delisting plans, the company must continue reporting financial results under SEC rules for at least one year after its delisting.