NYSE gearing up for all those IPOs in the pipeline!
By Cydney Posner
While Nasdaq is preparing for delinquencies and worse, the NYSE is gearing up for that big IPO pipeline. With the acquisition of the AMEX by the NYSE, the NYSE is consolidating its listing platforms to include NYSE and NYSE Alternext US (formerly, the Amex), with the result that it has expanded its listing standards to target a broader range of companies that meet lower listing standards. The NYSE is no longer accepting new equity listings on Arca (which was not exactly a roaring success).
The new standard is an alternative and will not replace any of the existing initial listing standards. The minimum initial listing requirements for the new NYSE standard, pro forma for the offering, are as follows:
- $150 million market capitalization
- $75 million total assets
- $50 million shareholders' equity
- $60 million public float for IPOs or $100 million public float for transfers
- $4 stock price
- 400 round lot holders
Companies that list under the new standard will not be required to have any minimum operating history prior to listing (although SPACs need not apply under this standard). This is apparently the first time that the NYSE would be adopting a traditional equity security listing standard that does not require some previous operating history of the listing company. In addition, the proposed standards are low enough to qualify companies on the NYSE that previously would not have qualified. In considering the listing under this new standard of companies transferring from other markets, the NYSE will consider whether the company’s business prospects and operating results indicate that the company’s market cap value is likely to be sustained or increase over time.
As under another NYSE standard, companies may apply to list under this new standard that have not previously sold registered common in a primary offering, but that wish to list private placed equity registered for resale by selling shareholders. For these companies, the NYSE is proposing that they have a global market capitalization of $180 million, which may be determined based on (i) an independent third-party valuation of the company and (ii) the most recent trading price for the company’s common stock in a trading system for unregistered securities operated by a national securities exchange or a registered broker-dealer. (The NYSE recently adopted provisions in relation to all of its existing initial listings standards that enable it to use third-party valuations, in limited situations, as a basis for determining compliance with the applicable market capitalization requirements.)
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