Off the Market?
Nasdaq is bending the rules to lend a hand to falling companies, but will it help?
No one likes rejection, but when Nasdaq's the one giving the boot, it's more than hurt feelings. When the Nasdaq drops a company for not maintaining stock price and market value minimums, it faces an uphill battle for survival. Most wind up on Over the Counter (OTC) bulletin boards, a riskier market that's scary to investors. Lenders don't like it either and often demand payment in full from delisted businesses.
Many companies avoided exile when Nasdaq suspended delisting for three months starting in September. The market has since proposed looser requirements, pending SEC approval, to give small-cap companies six months instead of three to lift prices to the $1 minimum-and conditional extensions.