So we're not there yet but I think we can see this in the future
Uplisting Power
Mar. 10, 2016 2:36 PM ET|5 comments | Includes: UNIR
Sergio Heiber
Sergio Heiber
Special situations, event-driven, newsletter provider, small-cap
(653 followers)
Summary
Stocks that uplist tend to experience an upside spike exceeding 25%.
The upside spike may not be sustained as the stock price becomes more reflective of the underlying fundamentals.
Not all OTC stocks rumored to be uplisting candidates are eligible for uplisting.
I was curious about the impact on stock price for an OTC stock that obtains a listing in one of the three major U.S. stock exchanges. I couldn't find any statistical information so I created my own analyses. This article is what I found about the OTC uplist process.
There are many companies that indicate that they will be applying for a listing but are far from eligible. This means that it is a perceived upgrade to be listed. Sure enough, there are stricter requirements for a listing, including SEC reporting and a listed company is generally considered a stronger company that an OTC stock. Additionally, many funds are prohibited by their own definition from buying OTC stocks. Obtaining a listing, therefore provides a greater pool of potential investors and greater liquidity as well as reducing the bid and ask spread.
OTC, or over the counter stocks, trade in a decentralized market not subject to reporting requirements as are listed stocks and offer less transparency. OTC stocks that are approved for a listing are called Jumpers.
NYSE listing requirements include a minimum price of $4 per share, 1.1 million shares outstanding with a market value of public shares in excess of $40 million, and a minimum of 400 round lot shareholders.
NASDAQ listing requirements include a minimum bid price of $4 per share, 1 million shares outstanding, at least 3 market makers, and a minimum of 300 round lot shareholders.
AMEX listing requirements must meet one of the following:
Have a pre-tax income in the most recent fiscal year or in two of the prior three fiscal years in excess of $750,000, a market value of the public float in excess of $3 million, a minimum stock price of $3, and total shareholders' equity in excess of $4 million.
Have a market value of the public float in excess of $15 million, a minimum stock price of $3, two years of operating history, and total shareholders' equity in excess of $4 million.
Have a total market capitalization in excess of $50 million, a market value of the public float in excess of $15 million, a minimum stock price of $2, and total shareholders' equity in excess of $4 million. The company must also meet a minimum number of round lot shareholders relative to the number of shares available in the public float.
For this study, I used stocks that were uplisted from OTC to one of the three major exchanges during the first three quarter of 2015. What I looked for was a spike in price prior to uplisting and ignored the overall trend if there was a spike on announcing application for listing. Then I looked at the spike in price on uplist and measured the spike in price over the subsequent short term.
Uplisting Power
Mar. 10, 2016 2:36 PM ET|5 comments | Includes: UNIR
Sergio Heiber
Sergio Heiber
Special situations, event-driven, newsletter provider, small-cap
(653 followers)
Summary
Stocks that uplist tend to experience an upside spike exceeding 25%.
The upside spike may not be sustained as the stock price becomes more reflective of the underlying fundamentals.
Not all OTC stocks rumored to be uplisting candidates are eligible for uplisting.
I was curious about the impact on stock price for an OTC stock that obtains a listing in one of the three major U.S. stock exchanges. I couldn't find any statistical information so I created my own analyses. This article is what I found about the OTC uplist process.
There are many companies that indicate that they will be applying for a listing but are far from eligible. This means that it is a perceived upgrade to be listed. Sure enough, there are stricter requirements for a listing, including SEC reporting and a listed company is generally considered a stronger company that an OTC stock. Additionally, many funds are prohibited by their own definition from buying OTC stocks. Obtaining a listing, therefore provides a greater pool of potential investors and greater liquidity as well as reducing the bid and ask spread.
OTC, or over the counter stocks, trade in a decentralized market not subject to reporting requirements as are listed stocks and offer less transparency. OTC stocks that are approved for a listing are called Jumpers.
NYSE listing requirements include a minimum price of $4 per share, 1.1 million shares outstanding with a market value of public shares in excess of $40 million, and a minimum of 400 round lot shareholders.
NASDAQ listing requirements include a minimum bid price of $4 per share, 1 million shares outstanding, at least 3 market makers, and a minimum of 300 round lot shareholders.
AMEX listing requirements must meet one of the following:
Have a pre-tax income in the most recent fiscal year or in two of the prior three fiscal years in excess of $750,000, a market value of the public float in excess of $3 million, a minimum stock price of $3, and total shareholders' equity in excess of $4 million.
Have a market value of the public float in excess of $15 million, a minimum stock price of $3, two years of operating history, and total shareholders' equity in excess of $4 million.
Have a total market capitalization in excess of $50 million, a market value of the public float in excess of $15 million, a minimum stock price of $2, and total shareholders' equity in excess of $4 million. The company must also meet a minimum number of round lot shareholders relative to the number of shares available in the public float.
For this study, I used stocks that were uplisted from OTC to one of the three major exchanges during the first three quarter of 2015. What I looked for was a spike in price prior to uplisting and ignored the overall trend if there was a spike on announcing application for listing. Then I looked at the spike in price on uplist and measured the spike in price over the subsequent short term.
Verus International, Inc. (VRUS) Stock Research Links
Louis Pasteur -- chance favours only the prepared mind.
Lecture, University of Lille (7 December 1854)
Lecture, University of Lille (7 December 1854)
