Listed

What is a listed company?

A listed company is a public company whose shares are approved for trading on a stock exchange (for example, the New York Stock Exchange or Nasdaq). Listing requires meeting exchange-specific standards and complying with securities regulations, including regular disclosure of quarterly and annual financial reports. Once listed, a company’s shares can be bought and sold by the public, providing market-determined pricing and liquidity.

Why companies list

Main reasons companies choose to list:
* Raise capital quickly and at scale without taking on debt.
* Increase visibility and credibility with investors, customers, and partners.
* Provide liquidity for founders and early investors.
* Use equity-based compensation (stock options) to attract and retain employees.
* Benefit investors through greater transparency and standardized reporting.

The IPO journey (overview)

Steps companies typically follow to go public:
1. Build the business, attract early investors, and establish financial controls.
2. Prepare audited financial statements and regulatory filings (e.g., SEC registration).
3. Hire underwriters and select an exchange.
4. Price the offering and set the IPO date.
5. List and begin trading; follow-up capital raises may occur through additional stock issuances (which can dilute existing shareholders).

Listing requirements (general)

Each exchange sets its own quantitative and qualitative requirements, which commonly include:
* Minimum market capitalization or market value of publicly held shares.
* Minimum number of publicly traded shares (public float).
* Minimum share price and trading volume (distribution standards).
* Financial thresholds such as revenue, earnings, assets, or cash flow.
* Corporate governance standards and continuing disclosure obligations.

Failure to meet ongoing requirements can lead to delisting.

Nasdaq listing highlights

Nasdaq is a major electronic exchange with specific initial-listing standards. Key elements include:
* Minimum publicly held shares (typically around 1,000,000 shares).
* Minimum bid/share price (commonly $4 at listing, with some lower-price alternatives under particular conditions).
* Minimum market value of publicly held shares (examples: approximately $15 million; alternative thresholds apply under different standards).
* Alternative qualification paths based on one of several standards:
* Earnings standard (aggregate pre-tax earnings over recent years).
* Cash-flow or capitalization-with-cash-flow standards (aggregate cash flow and average market cap requirements).
* Capitalization-with-revenue standard (higher market-cap thresholds tied to revenue).
* Assets-with-equity standard (higher asset and equity minimums allowing lower market-cap thresholds).
* Compliance with Nasdaq corporate governance rules.

Exact thresholds and combinations vary; companies must meet all criteria of at least one standard.

NYSE listing highlights

The New York Stock Exchange (NYSE) requires applicants to meet at least one of several financial standards. These can be based on:
* Pre-tax income,
* Global market capitalization,
* Shareholders’ equity, or
* Market value of outstanding shares.

The NYSE also enforces distribution standards (share price, number of publicly held shares, and trading volume) and corporate-governance requirements. The exchange is known for strict listing and continued listing standards.

Listed vs. unlisted companies

• Listed companies trade on formal exchanges and are subject to stricter disclosure and governance rules.
• Unlisted public companies (sometimes called unquoted public companies) do not trade on an exchange; they may trade over-the-counter (OTC) or not trade publicly at all. They are typically less regulated than listed companies but more regulated than private firms.
• Many large firms remain private (for example, some well-known family- or privately held companies), and some companies transition between public and private status via buyouts or takeovers.

Delisting — why it happens and what it means

Delisting can occur for several reasons:
* Failure to meet exchange standards (e.g., sustained low share price, insufficient market value).
* Bankruptcy or severe financial distress.
* A buyout or leveraged buyout that takes the company private.

Consequences:
* Shares may move to OTC markets or become illiquid.
* Delisting can signal severe trouble, but voluntary delisting for restructuring or private acquisition is also common. Companies sometimes return to public markets after a period private.

Key takeaways

• A listed company trades on a stock exchange and must meet exchange and regulatory requirements, including ongoing disclosure.
• Listing provides capital, liquidity, visibility, and employee compensation tools, but also increases public scrutiny and compliance obligations.
• Exchanges (Nasdaq and NYSE) offer multiple pathways to qualify, each with specific financial and governance criteria.
• Companies can be delisted for poor performance or taken private by buyers; unlisted public companies occupy a middle ground between listed and private firms.