FYI: A loophole in Nasdaq Inc.’s rules is under scrutiny after a roller-coaster ride in the stock of one small company highlighted how firms can go public without ample shares to trade.
Phunware Inc., PHUN -20.32% a software company planning to launch its own cryptocurrency, surged about 3,750% over six trading days to hit an intraday high of $550 a share on Jan. 10. Just 144,000 shares were eligible to freely trade during that period, according to the company. The stock closed at $95.85 on Wednesday, down 15% for the day.
Nasdaq’s rules require companies listed on the exchange to have at least one million publicly held shares. But that can include shares which are restricted from trading, such as those owned by employees or early investors who may be required to hold the stock for a period before selling.
Regards,
Ted
https://www.wsj.com/articles/how-a-nasdaq-loophole-fueled-one-stocks-rise-of-3-750-11550066400?mod=e2tw
