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Stock "uplisting" - what you should know. The rare inside view you never heard.

byRoy M. MAY 31St, 2021

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An uplisting is when a stock that trades in some market transfers to a bigger and more respectable exchange. 

This is exactly like when a sports team jumps to the top league after being really good at their current league. In this article we will take a look at the process a publicly traded company has to go through before being accepted to be listed on the NASDAQ.

The details here are taken from a rare interview with Andrew hall, who is the managing director for new listings at NASDAQ. Yes, there are so many applications of companies that want to be listed on the NASDAQ that they need a director just for that. Therefore, what you will read here is priceless and you probably won't find these details written anywhere else.

A map of the stock exchanges in the USA

There are three listing exchanges for common stock in the US.

  1. Nasdaq, which mainly lists technology and innovation related companies.
  2. NYSE (New york stock exchange) and NYSE american.
  3. The NYSE arcapellago (NYSE arca), which lists mainly equities (ETFs, ETNs, options etc).
Listing exchanges in the US

The OTC market

Many small public companies, that are not listed in any central exchange, are traded in the OTC (over-the-counter) market. This market is not a centralized exchange, but rather a network of brokers, that support trading in between themselves. Usually the assets traded there have low volume (not as many trades), and relate to small or new companies.

Another category of companies in the OTC are companies that were once in an exchange, but performed badly. When the price of a stock on the NASDAQ, for example, drops below 1$ for an extended amount of time, it is no longer eligible to be traded on the NASDAQ. In this case, the stock usually "drops" out of the exchange and into the OTC markets.

Usually an "uplisting" is when a company that trades in the OTC transfers its shares to NASDAQ or NYSE.

Andrew hall. Managing director for new listings at Nasdaq.

Reasons a company will want to uplist its stock

  1. It is difficult to be a company on the OTC markets
    • There are a limited number of brokers that deal with your stock and allow clients to buy and sell them.
    • The trading volume is smaller, thus attracting less investors.
    • Licensed advisors and brokers many times cannot recommend a stock to their clients if it is listed in the OTC, and not listed in a big and regulated exchange. Laws and regulations forbid them from doing that. For the company, it means less people buying their stock.
  2. On the NASDAQ (or NYSE), the company gets
    • Much more exposure to the stock as brokers can include it in people's pension portfolios, and recommend it to their clients.
    • Additional regulatory oversight that makes it more likely for investors to buy the stock

Why you should care about uplistings as an investor - The big rewards

Because of the reasons I have said above, normally only the rumor that a company is applying to be uplisted skyrockets their stock hugely. Let's take a look, for example, on "Quantum computing inc", trading in the OTC market under the ticker "QUBT". Since it has begun it's nasdaq uplisting application process, it has jumped from 3.4$ levels to a high of 25$.

QUBT's jump that happened because it started the uplisting process

A company that succeeds in an uplisting is almost guaranteed to have a blow up in its share price.

Uplisting requirements

The following are requirements for a stock to be listed on NASDAQ. These are checked by the new listings department.

  1. Share price. The price of the share needs to be above a certain value in the OTC market, for an extended period of time.
    • Must have a good enough balance sheet.
      • Must have a good enough balance sheet (not too many expenses relative to the revenue).
      • At least 5 million $ in share holder equity.
    • The company must not have a "going concern" in the last 12 months. A "going concern" means that when the company's balance sheet was checked for the health of the company by an auditor, and that auditor had a concern over the company's ability to sustain itself. It means that the company doesn’t have enough cash to suffice to next 12 without going bankrupt.
    • All executives of the company must clear a thorough background check. The company's executives are checked for any wrong doings in the past. There is an intelligence team just for that. If a top executive had any security violations, it will be found out.

    The uplisting process

    1. The company applies if it thinks it is meeting all the standards, or has the possibility to meet them with required fixes.
      • The initial review process takes about 6 to 8 weeks. During this period all of the requirements above are checked. If any issues arise they are documented.
        • If the company is missing more than 2-3 requirements, the application is denied right there and then. But, even if the company has some issues, they are usually given a chance to fix those, extending the review period.
        • Usually the common challenges that are allowed to be fixed during the review period are
          • A lot of cash burn
          • Not profitable
          • Raising capital by undermining themselves - meaning they sell their shares to raise capital with very cheap prices.
          • Owning a lot of royalties or revenues to private investors.

        • The application is either denied or approved. If there are special or severe issues, or if the known issues were not fixed quickly enough, the application is denied.


        You should be up to date with the news, and look for uplisting rumors for under the radar OTC companies.

        If you like what you read, spread the knowledge (and love):

        NOTE TO THE BELOVED READERS OF MARKET ALERTS: The views and opinions depicted in the article are for educational use, and do not constitute financial, investment, or other advice.

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