Nasdaq Proposes Listing Rule Changes Related To Reverse Stock Splits

Nasdaq has filed with the SEC a proposed rule change to establish listing standards related to notification and disclosure of reverse stock splits. According to Nasdaq, the volume of reverse splits has increased substantially from 94 in 2020 and 31 in 2021 to 164 reverse stock splits—just as of June 23, 2023. In most cases, Nasdaq observes, the purpose of the reverse splits is to comply with Nasdaq's $1 minimum bid price requirement to remain on the Capital Market tier. In light of this increased volume, Nasdaq is proposing amendments to its listing rules to "enhance the ability for market participants to accurately process these events, and thereby maintain fair and orderly markets." Failure to comply could result in a trading halt.