The Nasdaq Stock Market LLC has proposed a rule change that aims to modify the initial listing liquidity requirements for companies listing on the Nasdaq Global Market or Nasdaq Capital Market, particularly those undergoing an initial public offering (IPO). This change will require companies to meet the minimum Market Value of Unrestricted Publicly Held Shares (MVUPHS) solely from IPO proceeds, excluding resale shares. The proposal is intended to ensure adequate liquidity and reduce volatile trading on the listing date, aligning with the Securities Exchange Commission's objectives to protect investors and maintain orderly markets. Public comments are invited on the proposed rule changes by January 21, 2025.
Simple Explanation
The Nasdaq Stock Market wants to change a rule so that when a company first sells its shares to the public, it has to make sure the shares really sold in that sale, not ones just being resold, count toward showing there's enough interest from buyers. This rule helps make sure trading is smoother and less shaky on a company’s first day on the stock market.