Uplistings, explained (+ examples of uplisted stocks)


When a stock gets delisted from a major US exchange—namely the NYSE or Nasdaq—the news tends to fade. After all, many retail investors aren’t interested in the broker-dealer networks that are the OTC markets, where delisted stocks often go. 

However, it’s bigger news when a stock gets uplisted, returning to a major exchange from the OTC markets. Here’s what it means when a stock performs an uplisting from the OTC markets to the Nasdaq or NYSE, plus some examples of uplisted stocks this year.

TL;DR

  • A stock uplisting is when a stock goes from being listed on the OTC markets to a major exchange (like the Nasdaq or New York Stock Exchange).
  • OTC markets are broker-dealer networks that tend to be volatile. Trading on a standard exchange often means more trading volume, less volatility, and more liquidity.
  • To uplist, a stock must meet strict listing and regulatory requirements.
  • Hertz Global Holdings recently uplisted from the OTC to the Nasdaq under the ticker “HTZ.”
  • For retail investors, trading an uplisted stock comes with unique risks and opportunities.

What is a stock uplisting?

A stock uplisting occurs when an existing public stock gets listed on a major exchange. For example, a stock may go from being listed on the over-the-counter (OTC) markets to being traded on the Nasdaq Exchange.

The OTC markets are not an exchange, but rather a broker-dealer network that allows people to trade stocks directly.

In order for a company to get uplisted, it must apply to get listed on the exchange and provide financial documents. This helps the exchange ensure the company’s stock meets requirements from the exchange and the Securities & Exchange Commission (SEC).

Why companies perform uplistings

The OTC markets have a lower trading volume than standard exchanges. This makes OTC stocks more volatile than stocks on the NYSE or Nasdaq. Companies like to be on standard exchanges to get respect from retail investors so they can view it as a major public company.

Some stocks may be coming to a standard exchange for the first time after calling the OTC home. Alternatively, if an exchange delisted a company for failing to comply with listing requirements, the company may try to uplist its stock once it can meet the standards again.

Exchanges hold standards like:

  • Minimum stock price (NYSE and Nasdaq delist any stocks that fall below $1 for 30 consecutive days)
  • Corporate governance standards (NYSE and Nasdaq require an Independent Compensation Committee, for example)
  • Listing fees (companies must pay anywhere from $125,000–$295,000 to list, plus annual and additional share fees)
  • & more

Not all public companies successfully uplist. Their shares might fall after getting uplisted or they may not be able to sustain the requirements.

What to know about the Hertz stock uplisting

Maybe you’ve heard of companies going public-to-private-to-public-again (ahem—Panera Bread). But have you heard of companies going listed-to-delisted-to-listed?

That’s Hertz (NASDAQ:HTZ), which was previously public but ended up getting delisted. Now, Hertz has uplisted its way back to a major exchange.

Here’s what happened to Hertz and what’s to come:

  • Hertz Global Holdings filed for Chapter 11 bankruptcy in 2020. Business travel plummeted along with the demand for used cars. After a fraud scandal from former CEO Mark Frissora, it proved too much for Hertz to bear. 
  • The NYSE delisted Hertz stock because of its bankruptcy filing. The stock started trading on the OTC markets under the ticker symbol “HTZZ.”
  • By summer 2021, the company officially exited bankruptcy after repaying creditors and eliminating debt. The used car market and return to domestic travel helped Hertz find the liquidity to restore its brand. Such quick success was unheard of and investors flocked to the OTC stock in hopes of an uplisting. The OTC stock swelled nearly 600% in a year’s time.
  • On Nov. 9, Hertz uplisted its stock to the Nasdaq under the ticker “HTZ.”
  • HTZ stock is likely to remain volatile as it settles into its new exchange. It has a lot to prove with investors and upcoming earnings reports will be crucial.

Other stocks that have uplisted from the OTC to Nasdaq or NYSE

Hertz isn’t the only company to uplist this year.

For example, small-market business owner and operator Alpine 4 Holdings (NASDAQ:ALPP) uplisted from the OTC markets to the Nasdaq in late October 2021. At the same time, it acquired Identified Technologies, a Pittsburgh company that creates drone mapping software. As of mid-November, the uplisting isn’t going as ALPP hoped—the stock has lost nearly half of its value since the event. 

ALPP proves that uplistings can be just as (if not more) volatile than new IPOs (initial public offerings).

American Battery Metals Corporation (OTCQB:ABML) applied to uplist from the OTC to the Nasdaq in May 2021. The company’s OTC stock skyrocketed, gaining 50 percent of market value in the following month. The stock has since evened out and the company has yet to give an update on its Nasdaq application or its name change to American Battery Technology Company.

Risks and opportunities in uplisted stocks

Stocks on standard exchanges are known for being less volatile as well as having higher trading activity and liquidity. In addition to meeting listing requirements, successful uplistings require a company to earn trust from individual investors and institutional investors (like fund managers). Otherwise, the transition could be a flop.

Bear in mind: Just because a stock is on a major exchange doesn’t mean it’s a worthy investment. Just look at Top Ships (NASDAQ:TOPS), which has used the loophole of reverse stock splits to keep its share price high enough to satisfy the Nasdaq Exchange’s minimum. 

As of November 15, 2021, TOPS stock is worth $1.22 per share, having completed 10 reverse splits since 2008. Based on the current share ratio and price, one TOPS stock is down more than $15 billion from its starting value. Whereas some companies are vying for uplistings, others are simply trying to avoid getting delisted.

Related: What are micro-cap and OTC stocks?

Bottom line

Some uplisted stocks are returning to a major exchange while others are achieving it for the first time. Getting uplisted isn’t a guarantee for success, but it can be a good sign that things are going well for a company. Thanks to Nasdaq and NYSE listing and regulatory requirements, uplistings tell investors how a stock is faring and what may be next for the company behind the ticker.

Rachel Curry is Pennsylvania-based content writer and journalist talking all things finance. She likes to give meaning to numbers by humanizing them. You can connect with her on Twitter at @writingsofrach.

The above content provided and paid for by Public and is for general informational purposes only. It is not intended to constitute investment advice or any other kind of professional advice and should not be relied upon as such. Before taking action based on any such information, we encourage you to consult with the appropriate professionals. We do not endorse any third parties referenced within the article. Market and economic views are subject to change without notice and may be untimely when presented here. Do not infer or assume that any securities, sectors or markets described in this article were or will be profitable. Past performance is no guarantee of future results. There is a possibility of loss. Historical or hypothetical performance results are presented for illustrative purposes only.

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