What is listed
The listing is included and traded on a given exchange. Most stock exchanges have specific requirements that companies must meet in order to be listed and continue to remain listed.
Companies are frequently added to a given exchange, such as the Nasdaq. And sometimes companies that have not met all of the necessary registration requirements are removed from the list for a period of time until they meet the requirements again. Generally, companies prefer to be listed on major exchanges, such as the NYSE and Nasdaq, as they provide the most liquidity and visibility for a company’s stocks.
To be listed on Nasdaq, each company must meet at least one of the four sets of requirements, as well as the main rules of all companies.
NASDAQ requirements to list
- Companies must hold at least 1,250,000 shares listed on the stock exchange at the time of their registration, excluding those held by officers, directors or beneficial owners of more than 10% of the company.
- In addition, the regular bid price at the time of registration must be $ 4.00 and there must be at least three market makers for the security.
- Businesses can qualify under an alternative closing price of $ 3.00 or $ 2.00 if the business meets varying requirements.
- Each company is also required to comply with the Nasdaq 4350, 4351 and 4360 corporate governance rules.
- Companies must also have at least 450 round shareholders (100 shares), 2,200 shareholders in total or 550 shareholders in total with 1.1 million trading volumes on average in the past 12 months.
NASDAQ also requires that businesses meet all criteria according to at least one of the following standards:
- Earnings standard: Business must have total pre-tax profit of at least $ 11 million in the previous three years, at least $ 2.2 million in the previous two years, and no years in the previous three years cannot have a net loss.
- Capitalization with cash flow: The company must have a minimum total cash flow of at least $ 27.5 million for the past three years, with no negative cash flow during those three years. In addition, its average market capitalization in the previous 12 months must be at least $ 550 million and revenues for the previous year must be at least $ 110 million.
- Capitalization with revenue: Businesses may be exempt from the second standard cash flow requirement if their average market capitalization in the past 12 months is at least $ 850 million and revenues in the prior year are at least minus $ 90 million.
- Assets with equity: Businesses can eliminate cash and revenue requirements and reduce their marketing capitalization requirements to $ 160 million if their total assets are at least $ 80 million and their equity is at least $ 55 million.