What is the Nasdaq Global Select Market?
The Global Select Market includes companies with the largest market capitalization within the Nasdaq Composite Index and comprises 1,200 stocks. It is one of the three tiers within the Nasdaq Composite Index, along with Global Market and Capital Market.
In order to be part of the Global Select Market tier, a company must be able to meet certain financial requirements, liquidity requirements, and governance standards. it is known for being the most exclusive tier. Every year, Nasdaq reviews the mid-capitalization tier, Global Market, and evaluate whether any of the stocks within that tier are eligible for listing on the Global Select Market.
- The Nasdaq Global Select Market is one of three tiers within the Nasdaq Composite Index, with the other two tiers being the Capital Market and Global Market.
- The Global Select Market includes companies with the largest market capitalization within the Nasdaq Composite Index and comprises 1,200 stocks.
- For a company to become part of Nasdaq’s Global Select Market, it must fit into the strict financial and liquidity requirements.
Requirements and Criteria
For a company to become part of Nasdaq’s Global Select Market, it must fit into the strict financial and liquidity requirements. There are four different standards, and a company must be able to meet at least one.
For example, one standard for the financial requirements is based on capitalization with revenue. In such a case, for a company to be eligible, they need to average more than $850 million in the prior 12 months in terms of their market capitalization.
Additionally, the company’s previous fiscal year revenue must be above $90 million. However, if it can’t reach the standard, it can also be evaluated through three other standards – earnings, capitalization with cash flow, or assets with equity. In terms of the liquidity requirements, there are a few different standards to assess eligibility, i.e., IPOs versus seasoned companies.
The entry fees to be listed on the Nasdaq Global Select Market vary depending on the total shares outstanding. The listing comes with a $25,000 application fee, along with an entry fee, which ranges from $150,000 to $295,000.
In addition to the entry fees, there is an inclusive annual fee that varies depending on the total shares outstanding. The annual fee ranges from $46,000 to $159,000.
Importance of the Global Select Market Tier
The Global Select Market tier is important because investors use it to rank the size of a company and to understand its market capitalization. It helps identify which companies are part of the Nasdaq Composite Index top tier. It will explicitly show the companies within the technology sector with the largest market capitalization.
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