In a development that must have seemed impossible at the height of the bubble when its stock traded for hundreds of dollars per share, Sycamore Networks Inc. (Nasdaq: SCMR) announced this morning that it has received a delisting notice from Nasdaq.

This means that Nasdaq could drop Sycamore from the exchange in the coming weeks. In the meantime, the dreaded letter "E" will be tacked onto the end of Sycamore's once-famous stock symbol effective June 20, 2005.

In a press release issued this morning, Sycamore said it has received a letter from Nasdaq "indicating that the Company's common stock is subject to delisting pursuant to Nasdaq Marketplace Rule 4310(c)(14)." Nasdaq said the delisting notice comes in response to Sycamore's delay in filing its Form 10-Q for the period ended April 30, 2005 (see Sycamore Delays 10Q and Supercomm Snippets).

Last week, Sycamore announced it has delayed filing its quarterly 10-Q report "due to an internal investigation being directed by its audit committee relating to the accounting treatment for certain stock options granted during the period from 1999 to 2001." (See Sycamore Delays 10Q.)

Sycamore says it's appealing the notice and that it could be issued a stay.

Does that mean Sycamore will be gone from the Nasdaq for good? Probably not. Even if it is fully delisted, it could come back after getting its financial books in order. Plenty of other companies have clawed their way back onto Nasdaq after accounting problems were addressed.

Sycamore does not appear to be in a true financial crisis, as its stock was relatively stable on the news and its last balance sheet showed it holds $251 million in cash and cash equivalents, $422 million in short-term investments, and no debt.

However, the company seems unsure about quite what to do with that cash. Earlier this year, a source close to the company told Light Reading that Sycamore was considering selling some assets and closing up shop (see Will Sycamore Call It a Day?).

In morning trading, Sycamore shares traded down $0.03 (0.85%) to $3.50.

— R. Scott Raynovich, US Editor, Light Reading