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Nasdaq vs. NYSE American
Nasdaq Capital Market and NYSE American both provide national exchange opportunities for smaller and emerging public companies.
The appropriate exchange depends on financial condition, share price, public float, shareholder distribution, governance, transaction structure, industry, and capital-market objectives. Capital Markets Law Group helps companies compare the venues against their actual numbers before an application is filed.
What Should the Company Compare?
The exchanges differ in their requirement structures, application processes, and market models rather than in a single pass-fail metric. The table organizes the comparison, and a readiness review should test the company's actual figures against each venue's published standards.
| Consideration | Nasdaq Capital Market | NYSE American |
|---|---|---|
| Financial standards | Three alternatives: equity ($5M plus 2-year operating history), market value of listed securities ($50M with $4M equity), or net income ($750,000 with $4M equity) | Four standards built on stockholders' equity, pre-tax income, market capitalization, and total assets plus revenue |
| Share price | $4 benchmark, with closing-price alternatives of $3 and $2 when the underlying financial conditions are met | $4 under all four initial-listing standards, with a 90-day price-and-capitalization test for currently traded companies under two of the standards |
| Public float | $15M market value of unrestricted publicly held shares and 1 million unrestricted publicly held shares | $15M market value of unrestricted publicly held shares ($20M under the largest-capitalization standard) and a minimum public distribution |
| Shareholders | 300 unrestricted round-lot holders | 800 shareholders with 500,000 publicly held shares, or 400 shareholders with 1,000,000 shares; a trading-volume alternative exists |
| Market model | Electronic market with market-maker requirements | NYSE market model with a specialist allocation step |
| Governance | Nasdaq rules apply uniformly across the three tiers | NYSE American rules: majority-independent board, audit committee, nominating and compensation committees, with controlled-company and smaller-reporting-company accommodations |
| Application | Nasdaq Listing Center application | Confidential pre-application eligibility review, then a formal listing application |
| Discretion | Public-interest and qualitative review | Express discretion: meeting the numbers does not guarantee approval, and the Exchange cites business, management, regulatory history, and earning-power factors |
Because each exchange measures readiness differently, the same company can satisfy one venue's equity standard while falling short of the other's market-value standard. The comparison should be run on the company's audited figures and current share price, not on generalizations.
Why Might a Company Choose Nasdaq?
Potential considerations include:
- Recognition among growth companies
- Multiple market tiers
- Alternative financial standards
- Electronic market model
- Investor or underwriter preference
- Long-term plans to move to another Nasdaq tier
Why Might a Company Choose NYSE American?
Potential considerations include:
- NYSE branding
- Its trading model
- Multiple standards for smaller companies, including an assets-and-revenue standard and a market-capitalization standard that do not depend on earnings
- Industry or investor familiarity
- Confidential eligibility review before any application is filed
- The company's financial profile
Is One Exchange Easier?
Neither is universally easier. The appropriate choice depends on the company's actual:
- Financial statements
- Equity and market value
- Share price
- Public float
- Shareholder distribution
- Trading history
- Governance
- Management
- Regulatory history
- Transaction structure
How Do the Nasdaq Tiers Differ?
Nasdaq operates the Nasdaq Global Select Market, the Nasdaq Global Market, and the Nasdaq Capital Market. The Global Select Market carries the most demanding financial thresholds, the Global Market is more stringent than the Capital Market, and the Capital Market is the tier most emerging companies target. Corporate governance requirements are generally the same across the three Nasdaq tiers. A company can also transfer between Nasdaq tiers as its market value grows.
How Do the NYSE American Standards Differ From Nasdaq's?
NYSE American publishes four initial-listing standards in its Company Guide, and a company must satisfy all criteria under one of them:
- Stockholders' equity of $4 million, with pre-tax income from continuing operations of $750,000 in the last fiscal year or in two of the last three fiscal years
- Two years of operating history with stockholders' equity of $5 million
- Stockholders' equity of $4 million with total market capitalization of $50 million; companies already trading publicly must meet this figure and the $4 price for 90 consecutive trading days before applying
- Total market capitalization of $75 million, or total assets and total revenue of $75 million each in the last fiscal year or two of the last three
Across the standards, NYSE American also requires $15 million in aggregate market value of unrestricted publicly held shares ($20 million under the largest-capitalization standard), a $4 stock price, and the distribution requirements discussed below. The Capital Market tier's $4/$3/$2 price structure has no NYSE American equivalent: the NYSE American price requirement is $4 under each standard.
Nasdaq counts round-lot holders; NYSE American counts public shareholders against a public distribution of shares. Companies whose shareholders are concentrated, or whose securities are held largely in block by institutions, normally need a public distribution that appreciably exceeds the minimum.
How Do the Application Processes Differ?
NYSE American requires every applicant to complete a confidential pre-application eligibility review before it may file an original listing application. Once a company clears that review, the listing process follows seven steps: the company files its original listing application and supporting papers with the Exchange; files its Exchange Act registration statement and exhibits with the SEC; the Exchange reserves the ticker symbol; the Exchange approves the listing; the security is allocated to a specialist unit; the SEC registration statement becomes effective; and the security is admitted to dealings.
Nasdaq's process runs through the Nasdaq Listing Center, with an application, supporting documents, and an exchange review that may produce comments before conditional or final approval. Both exchanges retain qualitative discretion.
How Does Capital Markets Law Group Help?
Our services may include:
- Conducting a comparative readiness review
- Mapping the company's financials to each venue's standards
- Evaluating share price, float, and shareholder distribution
- Planning any recapitalization or reverse split
- Preparing SEC filings and governance changes
- Preparing the exchange application
- Responding to exchange comments
- Advising on continued-listing compliance
Keep Reading: Nasdaq and NYSE American Uplistings, Nasdaq Listing Applications and Uplisting Counsel, SEC Securities Offerings, Going Public and Form S-1 Registration Statements.
Frequently Asked Questions
Can a Company Apply to Both Exchanges?
It may evaluate both, but simultaneous applications may create strategic, cost, and communication issues.
Does a Reverse Split Work for Either Exchange?
It may help address price but does not satisfy other requirements.
Does Either Exchange Guarantee a Timetable?
No.
Can an OTC Company Uplist Directly?
Potentially, if it satisfies every applicable requirement.
Does Exchange Approval Mean Financing Is Complete?
No. Listing and financing are separate, although often coordinated.
Which Venue Should a Smaller Company Target First?
The answer comes from the company's numbers. A company whose stockholders' equity, public float, shareholder count, and share price fit one venue's standards, but not the other's, has its answer. When the figures fit both, the decision usually turns on market model, investor relationships, underwriter preference, and long-term listing plans.
Can the Company Transfer Between Exchanges Later?
Yes. Companies transfer between venues and between tiers as their market value and needs change. A transfer still requires the destination venue's review and satisfaction of its applicable requirements, so the application work is real even for an established listed company. A security moving from unlisted trading privileges to NYSE American listing must meet approximately half of the prescribed original-listing standards and pay a $4,500 transfer fee in place of the customary listing fee.
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Talk to Capital Markets Law Group About Choosing a Venue
Capital Markets Law Group assists companies in comparing Nasdaq and NYSE American, conducting readiness reviews, preparing applications, and coordinating governance, financings, and reverse splits. Contact the firm before an application strategy is chosen.