On Friday, December 19, 2008, the NASDAQ Stock Market LLC (“Nasdaq”) announced that it had made a filing with the Securities and Exchange Commission (SEC) to extend its suspension of the rules requiring a minimum $1 closing bid price1 and a minimum market value2 of publicly held shares to remain listed.3 Nasdaq had previously announced the temporary suspension of the continued listing requirements on October 16, 2008.4 Citing extraordinary market conditions, Nasdaq is seeking to extend the suspension of the requirements from January 16, 2009, to April 20, 2009. Since the suspension began, both the number of securities trading below $1 and the number of securities trading between $1 and $2 on Nasdaq have increased. During the proposed suspension, companies would not be cited for minimum bid price or market value deficiencies, and companies who were in a compliance period would remain suspended with respect to those requirements.
Nasdaq believes that, though no fundamental change in operations has occurred with respect to a majority of these companies, investor confidence alone has depressed pricing for companies that otherwise remain suitable for continued listing, and that extending the temporary suspension will permit companies to focus on running their businesses rather than satisfying market-based requirements. In addition, Nasdaq believes the extension will allow investors to purchase lower-priced securities without fear they will be delisted. Nasdaq has requested the SEC waive the five business day pre-filing requirement and the 30-day operative delay period in order to implement these changes immediately.