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.