companies are listed on the Nasdaq stock exchange
The Nasdaq stock exchange conjures up images of innovative technology brands that have defined and shaped industries. It is one of the two largest exchanges in the world, behind the New York Stock Exchange (NYSE). The NYSE may be older, but its iconic building at 11 Wall Street and historic trading floor have come to symbolize the pinnacle of the American stock market. Unlike the NYSE, the Nasdaq was founded in 1971 and is primarily an electronic market. The NASDAQ is known as a place for cutting-edge companies that seek global capital and liquidity. The NYSE is a marketplace for large established blue chip companies that serve traditional markets like financial services, energy, and consumer goods.
The NASDAQ is owned by the corporation Nasdaq, Inc. Nasdaq operates several markets around the world. Each of these markets is distinct in terms of its rules and regulations. For example, the NASDAQ Global Market is more regulated than the NASDAQ Capital Market. This means that companies listed on the NASDAQ Global Market must meet higher financial thresholds and must adhere to strict corporate governance requirements.
A company that lists on the Nasdaq is eligible to trade on any of its markets. However, a company must be publicly traded in order to list on the Nasdaq. Shares of common stock are the only type of equity that can be listed on the Nasdaq, with the exception of American depositary receipts, exchange-traded funds, and shares of real estate investment trusts.
What companies are listed on the Nasdaq stock exchange
Companies that want to be listed on the NASDAQ must first register with the SEC and meet other exchange requirements, including financial thresholds. In addition, the Nasdaq has introduced new rules that require companies to report on the diversity of their boards. This includes the number of directors who identify as being women, underrepresented minorities, or LGBTQ. Companies that do not include this information on their boards must publicly explain why.
In order to be listed on the Nasdaq, a company must meet specific finance, corporate governance, and liquidity requirements. The NASDAQ has three different tiers of listing: the Capital Market, Global Market, and the Global Select Market. Companies on the Capital Market typically have lower market capitalization levels and face less stringent financial and corporate governance standards than companies on the Global Market or Global Select Market.
In the past, many NYSE-listed companies have moved to the Nasdaq because of its technology focus and lower listing fees. Some of the most recent companies that have done this have included PepsiCo, Honeywell, and AstraZeneca. Those companies have found that the advantages of the Nasdaq outweigh the costs of maintaining listings on the NYSE, especially when it comes to the annual listing fee, which is currently $52,500 for 2024. This is much cheaper than the $80,000 that a company would pay to be listed on the NYSE. Depending on a company’s goals, it can be well worth the cost to gain the international recognition that comes with a listing on the Nasdaq.