Nasdaq debutes market for private companies, taking aim at SecondMarket and others.
Most people are familiar with Nasdaq as a stock exchange for many well known public companies. Most people would like to forget Nasdaq for its handling of the Facebook IPO, but that’s another story.
For private companies, even those with shares held by many people, it is difficult for their shareholders to find a buyer for their shares. Buyers often have a difficult time finding a way to invest in those companies if the Company is not offering directly to them on a private basis.
funding of $30 million within the last 2 years and an enterprise value of $50 million, based on the most recent financing round
Total assets of $50 million and annual revenue of $50 million in the latest fiscal year or 2 of the last 3 fiscal years
shareholders’ equity of $5 million and a two-year operating history
backing by a recognized financial investor with a track record of successful venture investments
The qualifying company will be subject to governance and reporting requirements.
Nasdaq is taking aim at SecondMarket and the burgeoning market for secondary transactions and the coming deluge of crowdfunding and other platforms for private company finance that people have been predicting since the passage of the JOBS Act. For their sake, I hope it goes better than the PORTAL market did way back when.
On Thursday, November 7, 2013, the Financial Industry Regulatory Authority, Inc. (“FINRA”) halted trading in all OTC Equity Securities pursuant to FINRA Rule 6440(a)(3). FINRA determined to impose a temporary halt because of a lack of current quotation information. Therefore, FINRA has determined that halting quoting and trading in all OTC Equity Securities is appropriate to protect investors and ensure a fair and orderly marketplace. The trading and quotation halt began on Thursday, November 7, 2013, at 11:25:00 a.m. E.T. FINRA will notify the market when trading may resume.
Nasdaq’s internal review of the hours-long trading shutdown of August 22, 2013 seems to show that its communications gear was overloaded. Nasdaq said that it is working on the issue and will strengthen its systems.
Apparently, a flood of messages from NYSE Arca hit the Nasdaq system at a rate of over 2.5 times what the Nasdaq system was designed to handle. Its capacity exceeded, the system degraded.
Contrary to some reports (or guesses), high frequency trading played no role in the shutdown.
Three of the five alleged hackers are at large as the DOJ issues indictments in what I referred to the “largest such scheme ever prosecuted in the United States.” The hackers, five Russian and a Ukrainian, stole more than 160 million credit card numbers from a number of payment processors, retailers and financial institutions.
Nasdaq was a target, but its trading platforms were not compromised.
Among the U.S. Attorneys mentioned in the article is Preet Bharara, who is having a big week. He is also involved in the SAC Capital insider trading case.