This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Ask TheStreet: Delistings

Editor's Note: Ask TheStreet is designed to answer questions about the market, strategies and investment methods. Please email us to ask a question, but keep in mind that we cannot offer specific investment advice.

What exactly happens when a stock is delisted and sent to the OTC bulletin board? What about if the stock is relisted? Thanks, H.L.

Gregg Greenberg: It's not a great sign when a company you own is demoted from a major league exchange like the NYSE or Nasdaq to the over-the-counter bulletin board. It usually means the company is having financial or reporting troubles, neither of which is an encouraging sign for shareholders.

Nevertheless, just like in baseball, sometimes being sent down to the minors gives a player a chance to get his act together before returning to the bigs. For example, one of the best-performing stocks on any exchange last year was NutriSystem (NTRI), which spent a brief time in Triple-A ball on the bulletin board before becoming an all-star performer on the Nasdaq.

Among other rules, the Nasdaq requires a company to maintain a minimum bid price of $1 per share. If a company's price closes for 30 consecutive business days below the minimum bid price, then the company is notified that it has 90 calendar days to meet the requirement or face delisting. The Nasdaq also will threaten a company with delisting if it doesn't provide timely financial reports to the Securities and Exchange Commission.

The NYSE has similar share-price standards for continued listings, as well as even stricter criteria for market capitalization and financial metrics.

If a company fails to meet these listing requirements and is booted off, then management may decide to trade their shares on the less-stringent over-the-counter bulletin board.

Unlike the Nasdaq, the OTCBB doesn't impose listing standards, provide automated trade executions or maintain relationships with quoted issuers.

So what does the OTCBB actually offer its 3,300 listed companies? By its own definition, the OTCBB is a regulated quotation service that displays real-time quotes, last-sale prices, and volume information in over-the-counter equity securities.

To remain eligible for quotation on the OTCBB, an issuer must remain current in its filings with the SEC or applicable regulatory authority, and, well, that's about it, which is why most financial advisers tell their clients to steer clear of bulletin board stocks.

1 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs