An American public company that cannot file its annual report on time files a notice with the Securities and Exchange Commission, known as Form NT 10-K. A timely notice gives an automatic grace period of 15 days for the annual report, and five days for a quarterly report.
The warning helps, but it does not remove the cost. The business-school professors Eli Bartov of NYU and Yaniv Konchitchki of Berkeley found that stock prices fall after these notices. Investors “do not accept at face value management assertions about the expected filing date.”