What Happens When Stock Moves From OTC to NASDAQ
Over the years, I’ve been asked a lot of questions. More than I can count. One question that keeps coming up is from traders who want to know what will happen to their OTCBB stock if it uplists to a major exchange like the Nasdaq.
Unless some special arrangement has been made, and you will know this from your brokerage firm, your stock will automatically transition to the Nasdaq.
Traders call this a jumper. Your shares will gain in value and they will automatically start trading on the NASDAQ.
If there is a change in the ticker symbol, the company will contact you about it by standard mail or through a brokerage firm like Scottrade.
But let me be clear about something. You are stupid if you think you can pick jumpers and make money at doing this.
Tom Cruise Crazy publishers will try and sell you an expensive subscription for stocks that go from the OTC to the Nasdaq. Jumpers that you can make 1,000%…3,500%, even 10,000% and more! Don’t believe it. It’s a scam.
In the thousands of traders I’ve known over the years, not one of them made money at picking jumpers.
Reality check. If the company was such a good company selling such a hot product, they never would have been listed on the OTCBB in the first place. They would have opted for an original listing on the Nasdaq in the first place. The cost for a listing on a major exchange is hardly more than a listing on the OTCBB. The only difference is the reporting requirements. The disclosure that the company must provide investors on a timely and regular basis.
That’s the anti-moron truth. The main reason for a company to list on the OTC and not the NASDAQ in the first place is that they do not want to meet the stricter reporting requirements of a major exchange. They do not want investors looking at their financial statements. They do not want investors to know what is really going on.
The only exchange fraught with more danger than the OTCBB is the pink sheets. But still, the OTCBB has thousands of fraudulent companies listed on it that will be delisted within a year and the CEO brought up on fraud charges by the SEC. Over many years, investing in the OTCBB because you want to bag a jumper stock will make you go broke. I should know, it happened to me. Yes, I’m a former jumper stock investor. As the saying goes, he who has grabbed a bull by the tail knows twice as much as he who never has. Don’t go grab the bull by the tail. Learn from my painful experience.
Look, we are at a market bottom. There is no reason to gamble in the OTCBB market when you can buy stocks that trade on major exchanges for near OTCBB prices! Plus you have the additional protection that goes with stocks that are listed on major exchanges.
Filed under: Stocks-Mutual-Funds
