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IPOs-Nasdaq Files Proposed Rule Change with SEC

Posted in For Entrepreneurs and Companies, IPOs & M&A, News and Recent Events, SEC

A_Ledbetter_LR.jpgCONTRIBUTED BY
Andrew Ledbetter
andrew.ledbetter@dlapiper.com

This week Nasdaq filed a proposed rule change with the SEC to adopt an alternative to the $4 initial listing bid price requirement.  As proposed, a company would be able to list with a:

  • $3 minimum price if the company qualifies under the $5M equity or $750,000 net income alternatives; or
  • $2 minimum price if the company qualifies under the $50M market value of listed securities alternative. 

In addition, the company must also have either:

  • Net tangible assets over $2M, if it has been in continuous operation for at least three years;
  • Net tangible assets over $5M, if it has been in continuous operation for less than three years; or
  • Average revenue of at least $6M for the last three years.

The proposal expressly reflects Nasdaq’s ongoing interest in competing with Amex on listings in the $2-3 range.  There is no immediately clear timetable on this, but it would be an interesting development for mid-size IPO candidates.

You can read the full text of the proposed rule here.