Stay in the loop! Subscribe to our newsletter and gain access to exclusive insights, trends, and news from the world of business and leadership. Don’t miss out!
The Nasdaq would prohibit trading of a company's shares if the stock price stayed below $1 for 360 consecutive trading days.
Nasdaq has proposed amendments to its listing rules, specifically targeting penny stocks. The changes, detailed in a filing posted on Nasdaq’s website, aim to implement a faster and more stringent delisting process for companies that fail to meet the exchange’s requirements.
The proposed changes could significantly impact how non-compliant companies are handled.
Under the current rules, companies listed on Nasdaq must maintain a closing stock price above $1. If a company’s stock price falls below this threshold for 30 consecutive trading days, it is deemed non-compliant with Nasdaq’s listing standards. The company is then given 180 days to regain compliance by bringing its stock price back above $1.
If a company fails to meet this requirement after the first 180-day period, it can request an additional 180 days to comply. Should the stock price remain below $1 at the end of this second compliance period, the company can appeal the delisting decision to Nasdaq’s hearings panel, temporarily halting the delisting process.
The proposed changes seek to expedite the delisting of non-compliant companies. If these amendments are approved, Nasdaq would suspend trading of a company’s shares if the stock price has remained below $1 for 360 consecutive trading days, eliminating the option to appeal the delisting decision.
Additionally, Nasdaq proposes to immediately issue a delisting determination to any company whose stock price falls below $1 within a year of executing a reverse stock split. The filing notes that some companies, often those in financial distress, engage in repeated reverse stock splits to artificially inflate their stock prices. Nasdaq argues that this behavior indicates deeper financial or operational issues, making such companies unsuitable for trading on its exchange.
If these amendments are approved by the U.S. Securities and Exchange Commission (SEC), they could lead to a more rigorous enforcement of Nasdaq’s listing standards. This would result in a quicker delisting process for companies unable to maintain a stable stock price above $1, potentially protecting investors from companies in severe financial distress.
When contacted by Reuters, Nasdaq declined to comment on the proposed changes. The two proposed amendments now await review and approval by the SEC.
Championing Excellence and Female Leadership in Engineering Sheeba Benny, a trailblazer in the field of electrical
How a 21-Year-Old Turned a Conservatory Start-Up into a $650,000 Business At just 21 years old,
With the global speaking industry valued at over $2 billion and growing rapidly, companies and event
In the world of technology-driven transformation, few leaders stand out as much as Senthil Babu, CEO
How DDSports and DeLuca Designs Business Academy are Revolutionizing Markets and Inspiring a New Generation of
