What Does it Take To Sell On The New York Stock Exchange?
Q: What does it take to sell on the New York Stock Exchange?
A: The biggest hurdle we will have is the Sarbanes-Oxley Act of 2002, a federal law that mandates financial record keeping and reporting practices for publicly traded corporations.
If you aren't 100% committed to keeping your financial records up to the standards required by Sarbanes-Oxley, then the New York Stock Exchange is not in your future.
The Sarbanes-Oxley act was approved in the House by a vote of 423 in favor, 3 opposed, and 8 abstaining. In the Senate, the act was approved with a vote of 99 in favor and 1 abstaining. President George W. Bush signed it into law, stating that it included "the most far-reaching reforms of American business practices since the time of Franklin D. Roosevelt. The era of low standards and false profits is over; no boardroom in America is above or beyond the law."
The good news is that the same levels of business growth (you will be assisted by Wizard of Ads, Inc.) and professional management (you will be coached and your people with be trained by Service Excellence, LLC) that impresses investment banks on Wall Street and investors who buy shares on the New York Stock Exchange, will also impress growth equity groups and private equity groups across America.
In other words, if you prepare for the New York Stock Exchange and later choose to sell to Private Equity instead, your company will be far more attractive to these investors. And if you choose to be part of an ExitReady bundle, you will have an additional advantage that is not available to other companies.
"Remember, if you prepare for the New York Stock Exchange and later choose to sell to Private Equity instead, your company will be far more attractive than it would otherwise have been."
Here is a basic overview of the process that self-selected ExitReady clients will undergo if they hope to experience the rich rewards of being part of an IPO on the New York Stock Exchange. This process requires careful preparation and adherence to strict regulatory guidelines, and there is no guarantee that we will be accepted.
These are the key steps:
1. Meeting the NYSE listing standards includes
Financial Standards: Companies must meet minimum financial requirements
Distribution Standards: The company needs to demonstrate a sufficient number of publicly held shares and shareholders, along with trading volume.
Corporate Governance: The company must comply with NYSE's robust corporate governance standards.
Operating History: A typical requirement is a three-year operating history, although joint histories may be considered in certain cases.
2. Choosing your market and reserving a ticker symbol
Market Selection: The NYSE offers different markets tailored to the needs of various companies and securities.
Ticker Symbol: Companies need to choose and reserve a unique ticker symbol of up to four characters.
3. Submitting the application and receiving a clearance letter
Application Submission: Companies must meticulously compile and submit a comprehensive listing application package that includes:
Audited financial statements adhering to SEC and NYSE standards.
Corporate governance documents, confirming compliance with NYSE criteria.
Detailed company information, including background, executive compensation, and strategy.
SEC registration form and legal opinions.
Confidential Review and Clearance: It is recommended to contact NYSE for a confidential review of eligibility before submitting the full application. This allows for feedback and potentially addresses any issues that might hinder the listing process.
Response from NYSE: After submission, NYSE will review the application and respond within approximately 14 business days, indicating whether the application has been accepted.
4. Working with a dedicated listing specialist
Dedicated Support: Once the application is accepted, the NYSE assigns a dedicated listing specialist to guide the company through the process of going public.
5. Engaging a Designated Market Maker (DMM)
Role of DMM: The company must select and engage a NYSE Designated Market Maker (DMM), an essential partner that facilitates the trading of the company's stock, ensuring liquidity and orderly trading.
6. IPO process (if applicable)
Underwriter Selection: For an IPO, the company selects a reputable underwriter (or group) to manage the offering.
Due Diligence and Documentation: This includes preparation of the registration statement and other marketing materials.
SEC Review and Road Show: The company goes through the SEC review process and presents its business to institutional investors, analysts, and other potential investors on a roadshow.
Pricing and Launch: Based on investor interest and market conditions, the IPO is priced, and shares are issued to public investors.
7. Final approval and listing
NYSE Approval: After the thorough review process and fulfillment of all requirements, the NYSE grants final approval for the company's listing.
Trading Commencement: The company's shares officially begin trading on the NYSE.
Important considerations
Rigorous Process: Listing on the NYSE is a demanding process requiring significant preparation, compliance, and adherence to regulatory standards.
Professional Guidance: Working with experienced underwriters, lawyers, and accountants is crucial for navigating the complexities.
Continuous Compliance: Once listed, companies must adhere to ongoing NYSE rules and maintenance requirements to avoid potential suspension and delisting procedures.
Remember, if you prepare for the New York Stock Exchange and later choose to sell to Private Equity instead, your company will be far more attractive than it would otherwise have been.
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