Centennial shares open low on penultimate day of NYSE trading
BOSTON (AP) _ Centennial Technologies Inc. stock fell further Thursday when trading in the scandal-plagued company resumed amid admissions that its financial results had been overstated as far back as 1994.
Even more uncertain days lay ahead. The top performer on the New York Stock Exchange last year, Centennial will be off the big board _ and every other major U.S. stock exchange _ altogether after Friday.
Centennial shares closed at $3.50 Thursday, down $11.25 _ or 76 percent _ from its last traded price on Tuesday, when the NYSE halted trading in its stock.
Centennial’s troubles became public Feb. 10, when the company said it had fired former chief executive Emanuel Pinez for misstating financial results for fiscal 1996. Pinez was jailed later that week and charged with securities fraud.
Securities and Exchange Commission officials have said Pinez overstated the company’s results and bought options so he could benefit if share prices fell.
In a statement released Thursday before its stocks resumed trading, Centennial said a review of its results from 1994 through the first quarter of 1997 showed ``cumulative losses for the periods in question.″
The extent of the losses was not expected to be known for another six to 12 weeks, the company said.
The statement also confirmed suspicions that, under Pinez _ who at one time owned a quarter of Centennial’s stock _ the company logged phantom sales figures to inflate the share price. Centennial makes parts and cards for personal computers.
``It is not possible at the present time for Centennial to estimate reliably the total losses which it will report for the periods in question, but the anticipated restatements will relate both to the company’s operations, including an inventory write-off and sales reversals, and to non-operating expenses,″ the company said.
Centennial’s gussied-up performance record made it one of the darlings of Wall Street last year. Its stock price increased by 450 percent to end the trading year at $55 a share before going into a free fall early last month.
Share prices rose sharply again Tuesday after the company’s interim chief, Lawrence Ramaekers, was quoted in a Reuters report as saying most of the company’s sales were legitimate. The NYSE halted trading in Centennial’s shares that same day after the company backed off Ramaekers’ statements.
Ray Pellecchia, an NYSE spokesman, said trading would be suspended again after Friday’s session, at which time the exchange would petition securities regulators to formally remove Centennial from its list of stocks.
Once the stock is delisted, people stuck holding onto it will have few trading options.
Both the American Stock Exchange and the Nasdaq Stock Market said Thursday they would not pick up the stock if asked.
``The problem for us would be we can’t accept anyone who doesn’t have reliable financial statements. We have a strict set of listing standards,″ said NASD spokesman Reid Walker.
That restricts Centennial to less rigorous and less liquid trading outlets like the OTC Bulletin Board, NASD’s over-the-counter service, or the so-called ``pink sheets.″
Neither of those services offers instantaneous computerized trading. And even they require Centennial to find a market maker _ someone who will agree to buy shares when someone wants to sell, and vice versa.
``The disadvantages are that it’s harder to follow and track. You can go for weeks without a trade occurring at all,″ Walker said.