Deflection, page-34

So there is a back door to Nasdaq called the “Capital Market” that lets little companies list alongside the big boys if they meet all the other conditions including independent directors, compensation committees, audits and diversity. But it requires a market cap of US $50 million, and ARR just dropped below that tonight. And “current publicly traded Companies must meet this requirement and the price requirement for 90 consecutive trading days prior to applying for listing.”

The other problem is that the Capital Market requires at least 400,000 American Depositary Receipts (ADR’s) to be issued. The ADR’s must be worth at least US$4, so a safe ratio would be about 50 ARR shares to one ADR. That means 20 million new shares would have to be issued. Not a major dilution, but dumping these on Nasdaq all at once would probably result in a further decline of share price. Australians are used to getting a discount when there is a capital raise, even for AU $2 million.

I don’t understand why Nasdaq is considered such a Holy Grail. As the chart shows, it’s more of a leaky cup.