TEARDROP STOCK DROPS

TearDrop Golf Company announced that it is not in compliance with Nasdaq SmallCap Market listing qualification requirements. Specifically, it is not currently in compliance with the net tangible assets/market capitalization/net income requirement for continued listing on the Nasdaq SmallCap Market. Nasdaq requires that TearDrop must maintain any of the following: $2 million in net tangible assets, net income during the fiscal year of $500,000, or market capitalization of $35 million. TearDrop has requested a hearing before The Nasdaq Listing Qualifications Panel to request an extension for achieving compliance.

The company's stock will be delegated to the Over The Counter Bulletin Board, if it is not successful in persuading Nasdaq officials of its impending compliance. The move will appear transparent to many investors. However, the arena in which it would trade has historically been ripe for stock manipulation.

Rudy Slucker, TearDrop Golf's Chief Executive Officer, stated that his company would be given a hearing in October. "I feel comfortable that they will give us time to work on our turn around," Slucker remarked. In a prepared statement the CEO commented, "The recent sales growth, return to profitability and the extremely strong market value of our brand names, indicate that TearDrop should contribute to the quality of the Nasdaq SmallCap market. Given recent positive operating results, we remain confident that with sufficient time, the Company will return to compliance. It is unfortunate that the unquestioned value of our brand names cannot be used in the calculation for meeting Nasdaq's net tangible asset listing requirement."

It may be time to pay the piper for Slucker and TearDrop Golf. You also can't take three companies (TearDrop, Ram and Armour) that were each losing money and make them into a winner overnight and that's what he tried to convince everybody he did. Sales might have looked good early on because of the strategy of closeouts and dumping of product, but it has caught up with them now.

The brand equity Slucker claims is considered an intangible asset and subject to opinion regarding its value. Rest assured, Nasdaq officials would be quick to point this out in the upcoming hearing. Some within the golf industry, consider the Ram and Armour (especially the Armour) brands devalued in the short time TearDrop has owned them, by selling in places like Sam's Club.

The announcement prompted its shareholders to drop the stock much like rats fleeing a sinking ship. The volume was brisk despite an upcoming three-day weekend, with over 1.8 million shares trading on Friday alone. The average 30-day volume for TDRP stock is 64,818 share. When it was all said and done, the stock finished the day at $1 9/32, down 37.88 percent from its Thursday closing price. Friday's closing price set a new 52-week low, but it was able to bounce of its intraday low for the day of 75 cents a share. It would appear the company has a long road ahead of itself, to convince Nasdaq officials and investors of better days yet to come.