In order to stave off mass delistings resulting from the turmoil in the equity markets over the last several months, the securities exchanges have provided relief from their minimum continued listing criteria. Most recently, the NYSE on Jan. 22 temporarily reduced its minimum average global market capitalization requirement for continued listing from $25 million to $15 million. This lower floor continues in effect for three months, through Apr. 22, 2009.
Under the NYSE’s continued listing standards, listed companies must satisfy both a minimum share price and a market capitalization requirement. There are four different market capitalization tests; the applicable test is determined by the listing standard used by the issuer at the time of initial listing. At a minimum, all four of the tests require a market capitalization of at least $75 million, coupled with either a minimum stockholders’ equity or a revenue requirement. To the extent that the listed company ceases to comply with the applicable market capitalization requirement, the NYSE provides the listed company with as much as 18 months to cure the deficiency. Both the minimum share price and the market capitalization requirements, as well as the NYSE’s cure policy, are described in “Nasdaq and NYSE Continued Listing Requirements—A Primer for Turbulent Times” (SRZ Alert, Dec. 8, 2008).
NYSE-listed companies also must satisfy a separate, lower market capitalization requirement. Under this requirement, to the extent that the listed company’s average global market capitalization drops below $25 million for 30 consecutive trading days, the NYSE will commence delisting proceedings immediately; the listed company will not have the opportunity to develop and implement a corrective plan. This $25 million floor has been reduced to $15 million through Apr. 22, 2009.
Separately, Nasdaq also has provided relief from its minimum continued listing requirements, as described in “Nasdaq Extends Suspension of Listing Requirements” (SRZ Alert, Dec. 30, 2008).