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When a company lists on Nasdaq in conjunction with a public offering, Nasdaq uses the information provided in the company’s publicly filed registration statement to measure compliance with initial listing requirements that are dependent on the price of the company's security.
Calculating Compliance with Price Based Initial Listing Standards
Nasdaq determines whether a company meets the applicable price based initial listing standards by referencing the registration statement’s disclosed offering price range. Specifically, Nasdaq focuses on the minimum price within the range stated in the registration statement to assess compliance with various criteria, including the bid price requirement, the market value of listed securities, and the market value of publicly held shares.
For example, if a company is offering 1 million shares with an offering price range between $14 and $16, Nasdaq will use the lower end of this range, $14, for determining compliance. In this case, Nasdaq would consider the total offering size to be $14 million when evaluating if the company meets the initial listing standards.
Impact of Registration Statement Amendments
If amendments to the registration statement occur before listing and result in a reduced minimum offering price, Nasdaq will recalculate the company’s compliance based on this lower price. It is important for companies to assess whether they need to increase the number of shares offered in response to the amendment. This adjustment ensures that the registration statement continues to meet all applicable initial listing requirements. Failure to update the number of shares could lead to delays in the listing process until a revised registration statement is filed.
Units and Underlying Components
For offerings involving units, Nasdaq applies specific methods to value the components of the units. Detailed guidance on how Nasdaq values these components to determine compliance with minimum bid price requirements can be found in FAQ 1836. This ensures that the overall evaluation of the listing criteria takes into account the full structure of the offering.
In summary, Nasdaq uses the disclosed minimum offering price from the registration statement to determine compliance with pricebased initial listing standards. Companies must ensure their registration statements reflect all necessary details to meet these requirements and address any amendments promptly to avoid delays in the listing process.
