Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Three Amigos Stock Thread -- Ignore unavailable to you. Want to Upgrade?

To: Sergio H who wrote (478)	2/8/1998 4:48:00 PM
From: lostmymoney	Respond to of 29382

This is long, new requirements for Nasdaq. Also they are taking suggestions from investors on OTC BB stocks. NEW NASDAQ CONTINUED LISTING REQUIREMENTS On February 23, 1998, new continued listing requirements go into effect for Nasdaq stocks. What does this mean for you? If you own Nasdaq stocks which don't meet the new requirements (usually very small companies), the stocks could end up on the OTC Bulletin Board (OTCBB). Stocks which move to the OTCBB often suffer a decline in stock price and decreased liquidity. Additionally, the companies will no longer have to meet any Nasdaq qualitative and quantitative requirements. Although moving to the OTCBB is generally not a good thing for stocks, with most brokerages you can still trade OTCBB stocks just like Nasdaq stocks, so you don't have to worry about whether you will be able to sell your OTCBB stock. How can you tell if any of your Nasdaq stocks don't meet the new requirements? We have a list of the new requirements on our web site at: financialweb.com Make sure you look at the new requirements and not the current (soon to be old) ones. Also, you need to look at the requirements for the tier of Nasdaq which your stock trades on - The Nasdaq SmallCap Market or The Nasdaq National Market - since they have different requirements. To see if your stock meets the requirements, you can look at the company's latest financial statements filed in the SEC's EDGAR database at: sec.gov What exactly will happen on February 23? According to Nasdaq spokesman Reid Walker, in some cases companies will be notified immediately about delisting proceedings, while in other cases the companies will be given time to get back into compliance. It depends on which listing requirements were not met. For example, a Nasdaq SmallCap company not meeting the new corporate governance standards would probably be notified immediately of delisting proceedings, while a company not meeting the minimum $1 bid price would be given more time. Companies which are notified about delisting proceedings can request a hearing with Nasdaq which could buy the company some more time to get back into compliance. Two of the significant changes for The Nasdaq SmallCap Market are the corporate governance standards, which used to be only for the Nasdaq National Market, and the minimum $1 bid price. Previously, a stock could trade under $1 as long as it met alternative requirements. These alternative requirements will no longer exist. Under the new rules, a company is not in compliance with the minimum price requirement when its stock drops below $1.00 for 30 trading days. The company will be notified of delisting proceedings unless the stock closes at $1.00 or more for ten consecutive trading days, within 90 calendar days of falling out of compliance. According to Reid Walker, on February 23, Nasdaq will look at the previous 30 trading days for stocks under $1 at that time. The 90 day clock for getting back into compliance begins after trading below $1 for 30 days, even if some of those 30 days were before February 23. The clock begins immediately for stocks which were under $1 for the 30 days prior to February 23. To avoid being delisted due to stock price, many companies will use reverse splits to increase the price of their stocks. But this will only work if the company meets all the other requirements as well. Also, stocks that are reverse split often decline in price. Nasdaq National Market stocks that don't meet the new continued listing requirements will likely end up on either The Nasdaq SmallCap Market or the OTC Bulletin Board. In order to move to The Nasdaq SmallCap Market, I was told by Nasdaq that the company would have to meet the initial listing requirements of The Nasdaq SmallCap Market rather than continued listing requirements. However, Nasdaq seems to be willing to waive certain initial listing requirements on occasion (such as minimum price), as long as the company can eventually meet continued listing requirements. ------------------------------------------- PROPOSED RULE CHANGES FOR OTC EQUITY SECURITIES AND THE OTC BULLETIN BOARD As we reported in December, the NASD's Board of Governors approved a series of proposed changes for OTC stocks and the OTC Bulletin Board. NASD Regulation is currently seeking comments from the public on these proposals. If you have any opinions on the proposals, now is the time to let the NASD know. The comment period only lasts until February 16, 1998 so there's not much time left. The proposals can be found at: nasdr.com The proposal that will probably be of most interest to people is: 98-14 NASD Requests Comment On Limiting Quotations On Over-The-Counter Bulletin Board (OTCBB) To Securities Of Reporting Issuers. You can access this proposal directly at nasdr.com If, after looking at the proposals, you'd like to e-mail any comments to the NASD, you can send them to pubcom@nasd.com According to Michael W. Robinson of the NASD, once the NASD evaluates the comments they receive, they will submit the rule proposals to the Securities and Exchange Commission (SEC). The SEC will then have its own public comment period for the proposed rule changes. After that, the SEC will make a decision on the rules. It is currently unknown how long this process might take. And even after the rules are approved by the SEC, existing OTC Bulletin Board companies will probably be given a period of time to comply with the new rule requiring them to file their financial statements with the SEC. Therefore, investors should have plenty of time before they have to worry about their companies being removed from the OTC Bulletin Board. Here's a quick summary of the proposed changes: - Allow only those companies that report their current financial information to the SEC, banking, or insurance regulators to be quoted on the OTC Bulletin Board. The rule proposal will provide for a phase-in period for those securities already quoted on the OTC Bulletin Board. - Require brokers, before they recommend a transaction in an OTC security, to review current financial statements on the company they are recommending. - Prior to the initial purchase of an OTC security, require that every investor receive a standard disclosure statement (prepared by the NASD) emphasizing the differences between OTC securities and other market-listed securities.