Investing in the NASDAQ is a great way to tap into some of the world’s most innovative companies. Before investing, it is important to understand the requirements for being listed on the NASDAQ so you can be sure that your investment meets all the necessary criteria.
Listing Requirements for All Companies
To be listed on the NASDAQ, a company must fulfill the following requirements:
- Be registered with the U.S. Securities and Exchange Commission
- Have a minimum market value of publicly held shares of $15 million
- Have a minimum of 1,250 shareholders
- Issue at least 10,000 publicly traded shares
- Meet certain financial and liquidity thresholds
Standard No. 1: Earnings
A company must have a minimum of four quarters of cumulative, positive net income in the prior two years and no negative net income in the current year’s most recently completed quarter.
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Standard No. 2: Capitalization With Cash Flow
A company must have a minimum of four quarters of uninterrupted positive cash flow, with no material adverse effect on the cash balance in the most recently completed quarter.
Standard No. 3: Capitalization With Revenue
A company must have a minimum of four quarters of uninterrupted revenue growth, with no material adverse effect on the revenue in the most recently completed quarter.
Standard No. 4: Assets With Equity
A company must have a minimum of two quarters of uninterrupted growth in total assets, with no material adverse effect on the equity position in the most recently completed quarter.
