Irish tech companies aspiring to a flotation on Nasdaq have no doubt taken full note of the ruthlessness with which the US market treats laggards - the decimation of the CBT share price is proof enough of that. Getting a Nasdaq listing is one thing, keeping it is another.
Clearly, the National Association of Securities Dealers - the parent of Nasdaq - is not interested in penny shares, not to mention dollar shares, judging by the alacrity that it has delisted a whole list of companies since the beginning of the year.
In the first 10 months, Nasdaq has cancelled the listing of a record 735 companies which failed to match the exchange's exacting standards.
Under the rules introduced in August, companies are in danger of being kicked off Nasdaq if their share price falls below $1 for 30 days, the market capitalisation falls below $5 million or capital reserves below $4 million. The reasoning here is to get rid of the higher-risk companies and maintain Nasdaq's reputation.
It seems that most of the companies removed from Nasdaq end up trading over-the-counter on the largely unregulated OTC Bulletin Board, something like, the Ofex market in London and enjoying the same reputation. Thankfully, none of the Irish companies on Nasdaq has fallen foul of the new listing rules, although Trinity Biotech - currently trading at $1 1/2 and briefly below $1 earlier this year - does not have a huge margin for error.
