How does NASDAQ’s listing process work for new companies?

NASDAQ’s listing process involves several steps that companies must complete to be listed on the exchange. The process ensures that only companies meeting NASDAQ’s standards and requirements are admitted. Here is an overview of the listing process:

1. Initial Application: Companies interested in listing on NASDAQ must submit an initial application, which includes detailed information about their business, financials, and governance. This application provides NASDAQ with an overview of the company’s operations and helps assess its suitability for listing.
2. Due Diligence: NASDAQ conducts a thorough due diligence process to evaluate the company’s financial health, compliance with regulations, and overall readiness for listing. This process involves reviewing financial statements, corporate governance practices, and legal matters.
3. Listing Requirements: Companies must meet NASDAQ’s listing requirements, which vary depending on the market tier (NASDAQ Global Select Market, NASDAQ Global Market, or NASDAQ Capital Market). These requirements include minimum financial thresholds, such as revenue, net income, and market capitalization, as well as corporate governance standards.
4. Underwriting: Companies typically work with underwriters to facilitate the initial public offering (IPO) and set the terms for the offering. Underwriters help determine the offering price, manage the sale of shares, and assist with regulatory filings.
5. Approval and Listing: Once NASDAQ completes its review and the company meets all requirements, NASDAQ grants approval for listing. The company’s shares are then officially listed and begin trading on NASDAQ.

The listing process ensures that companies are well-prepared for public trading and comply with NASDAQ’s standards. It helps maintain the quality and integrity of the exchange, providing investors with confidence in the listed companies.