Are YOU Ready For A New Class of OTCBB Stocks? by Dan Holtzclaw
With the huge decline of the Nasdaq Stock market over the past 8 months,
many stocks on this tech heavy market are in danger of being delisted.
Former high flying internet stocks such as The Globe.com (Nasdaq: TGLO),
Garden.com (Nasdaq: GDEN), Dr. Koop.com (Nasdaq:KOOP), and QuePasa.com
(Nasdaq: PASA) are all flirting with disaster as they each have fallen
under the $1 minimum bid requirement.
Other well known stocks such as Rhythms Net Connections (Nasdaq: RTHM),
PSI Net (Nasdaq: PSIX), NetZero (Nasdaq: NZRO), and Internet America
(Nasdaq: GEEK) have also dropped dramatically over the past year and if
their slide continues, they too may face the prospect of delistment from
the Nasdaq.
So what happens if these stocks get the boot from the Naz? Well, before
that happens, the Nasdaq tries to give these companies ample opportunity
to remedy the situation. If a company's share price falls under a dollar
for 30 consecutive trading days, the Nasdaq sends the company a warning
and gives it 90 days to bring the price back up to snuff. If the company
succeeds for 10 consecutive trading days, it gets relisted. If the company
tries and fails, it can appeal to a hearing panel, twice. If the company
still cannot get its share price over a buck, it then gets the boot.
If these companies do get delisted, is it possible that they could end up
on the OTCBB? It is most likely that these companies would apply to the
AMEX before they would apply for an OTCBB listing, but there is a remote
possibility that they could end up on the bulletin board exchange.
Can you imagine the former internet IPO darling The Globe.com, the stock
that jumped 606% in its November 1998 initial public offering, being
grouped with the likes of many OTCBB stocks who struggle to even file
their SEC documents in a timely manner? Don't think it a pipe dream
because it may happen!
The following is a list of big board stocks that are trending toward
delistment from the large exchanges. Unless things turn around for the
following corporations, the AMEX or OTCBB markets may be calling:
TFSM, AKLM, PIN, AHWY, AWEB, BS, CYCH, BAMM, CKE, CASL, ETYS, RTHM, PSIX,
PASA, KOOP, ESTM, CDWI, GDEN, GEEK, IVIL, LCP, MVL, NZRO, THIN, OWC, PMOR,
PCLN, SATH, TGLO, VNGD, and SLVR
Information about $1 minimum bid requirement:
The current amendments to The Nasdaq Stock Market listing requirements,
which were approved by The U.S. Securities and Exchange Commission on
August 22nd, 1997, further strengthen both the quantitative and
qualitative requirements for issuers listing on Nasdaq®. These changes
materially enhance the threshold criteria necessary to qualify for listing
on the Nasdaq National Market.
Significant changes are highlighted below:
$1 Minimum Bid Price Required for Common and Preferred Stock
Common and preferred stock must have a minimum bid price of $1. The $1 bid
price requirement provides a safeguard against certain market activity
associated with low-priced securities, and also enhances the credibility
of the market. Nasdaq is the only market that has a stated minimum bid
price requirement. |
