Nasdaq Cracks Down on Penny Stocks: 10 Cents Too Low?
Published Date: 9/8/2025
Notice
Summary
Nasdaq is changing its rule so that if a stock’s price stays at or below 10 cents for 10 days straight, the stock will get a warning and could be kicked off the exchange. This affects companies with low-priced stocks and helps keep the market fair and active. The new rule aims to speed up the process and protect investors, with changes expected to take effect soon after approval.
Analyzed Economic Effects
3 provisions identified: 1 benefits, 2 costs, 0 mixed.
Immediate delisting at $0.10 for 10 days
If your Nasdaq-listed company's stock has a closing bid price of $0.10 or less for ten consecutive trading days, Nasdaq will issue a Staff Delisting Determination and the company will be ineligible for any compliance periods under Listing Rule 5810. This replaces the prior sequencing that first required a security to be below $1.00 for 30 consecutive trading days before the Low Price Rule would truncate compliance periods.
Suspend Nasdaq trading during appeals
When a security meets the revised Low Price Requirement (closing bid ≤ $0.10 for ten consecutive trading days), Nasdaq will suspend that security from trading on Nasdaq during any Hearings Panel review, and the security will trade over-the-counter while an appeal is pending. The Hearings Panel retains discretion to grant an exception for up to 180 days from the Delisting Determination or to reinstate Nasdaq trading if it finds the company in compliance.
45‑day operative delay and limited exception
The proposed rule change would become operative 45 days after SEC approval. The Low Price Requirement will apply only to securities that have a closing bid price of $0.10 or less for ten consecutive trading days after that operative date; a company that already received a Delisting Determination and appeared before a Nasdaq Hearings Panel on or before the operative date is not subject to the change while the Panel retains jurisdiction.
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