The $1 minimum price rule for U.S. stocks

1. $1 Minimum Bid Price Requirement: Nasdaq listing rules require companies to maintain a minimum bid price of $1 per share. If the closing price falls below $1 for 30 consecutive trading days, the company receives a compliance warning and enters a first 180-day compliance period. If it still fails to meet the requirement, it may apply for an additional 180-day second compliance period—but only if it satisfies specific conditions. 0.1-dollar 'Red Line' New Rule: Effective December 2025, a new rule will trigger mandatory delisting—immediately and without grace period—if a stock’s closing price is ≤$0.10 for 10 consecutive trading days, regardless of whether the company is already in a $1 compliance period. During any hearing process, trading of the stock will be suspended. Compliance Restoration Requirement: To regain compliance, a company must achieve a closing price ≥$1 for 10 consecutive trading days within its compliance period. If it fails to do so after both compliance periods, its shares will be transferred to over-the-counter (OTC) trading during the appeal process. This can also serve as an investment strategy; however, note that companies approaching this threshold often execute reverse stock splits—for example, consolidating 10 shares into 1 (as recently done by CCTG). The company’s resolution even mentions potentially conducting another 5-for-1 split later—i.e., consolidating 50 shares into 1.

Low-priced stocks | 2024 Nasdaq U.S. listing requirement updates (summary)

In 2024, Nasdaq has been revising its procedures for handling low-priced companies, with a focus on reducing the number of cheap, high-risk stocks traded on its exchange. Here’s what you need to know. I. Low-Priced Stocks: Amendments to the Bid Price Compliance Process Proposed Date: August 6, 2024 Status: Currently open for public comment. The U.S. Securities and Exchange Commission (SEC) issued a notice seeking public comments on the proposed rule changes on August 19, 2024, and will decide within 45–90 days whether to approve or reject the changes. Summary: A listed company failing to maintain a $1 minimum bid price for more than 360 days will face immediate suspension—even if it appeals Nasdaq’s delisting decision. Any company that executed a reverse stock split within the past year and whose stock remains below the $1 minimum bid price will be delisted immediately (subject to appeal). In-depth Details: Under Nasdaq’s current listing rules, if a listed company’s minimum bid price falls below $1 for 30 consecutive business days, it receives a delisting notification from Nasdaq. From the date of notification, the company has 180 calendar days to regain compliance—by achieving a bid price of $1 or higher for at least 10 consecutive trading days within that period. If it fails to comply within the first 180 days, it may be granted a second 180-day compliance period—provided it meets all other initial listing standards at the end of the first compliance period. If a company fails to satisfy the minimum bid price requirement during the second 180-day compliance period, Nasdaq will issue a delisting determination. The company may appeal to the Nasdaq Listing Qualifications Hearings Panel. Under current rules, its securities continue trading on Nasdaq during the appeal—effectively extending the total compliance window to up to 540 days without suspension or delisting. Nevertheless, Nasdaq retains the authority to delist any security whose closing price is $0.10 or lower for 10 consecutive trading days at any point during either compliance period. On August 6, 2024, Nasdaq proposed new rules stipulating that any common stock failing to meet the minimum bid price requirement will be immediately suspended from Nasdaq trading for 360 days. Companies may still appeal to the Hearings Panel, which may grant a third 180-day remediation period—but during that time, the security will remain suspended from Nasdaq trading. Once suspended, the company’s securities will trade on the over-the-counter (OTC) market during the appeal. Additionally, Nasdaq proposed that any company failing to meet the minimum bid price requirement—and having executed a reverse stock split within the prior year—will be subject to immediate delisting (appealable). According to Bloomberg, AI and biotech startups face the highest delisting risk under the proposed rules. Nearly 40% of companies with market prices below $1 belong to the healthcare sector. As of August 21, 2024, 430 stocks traded below $1—compared to just 72 such stocks on the same date in 2021. II. Minimum Bid Price Compliance and Reverse Stock Splits

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