Report: Nasdaq Looking More Closely at IPOs After Big Ups and Downs

Nasdaq is reportedly upping its scrutiny of small-cap companies’ initial public offerings (IPOs) after some new listings made massive gains followed by similarly big drops.

The stock exchange is looking more closely at companies across industries and countries, and some firms have reacted to the resulting uncertainty by delaying their IPO plans, Bloomberg reported Thursday (Sept. 22), citing unnamed sources.

A Nasdaq spokesperson said in an email to PYMNTS, “Nasdaq’s markets are and will continue to be open to companies. As a self-regulatory organization, Nasdaq will conduct careful and diligent review of companies that intend to list on our markets.”

According to Nasdaq’s most recently released Monthly Metrics, it had 5,064 total listed companies in the second quarter, up from 5,039 companies in the first quarter and 4,550 in the second quarter of 2021.

Examples of companies that have shown dramatic rises and drops include AMTD Digital (which listed on NYSE), Addentax Group Corp. and Magic Empire Global Ltd. AMTD Digital shares, for example, rose 32,000%, fell 97% and remain 791% higher since the company’s July IPO, according to the Bloomberg report.

As PYMNTS reported in August, AMTD Digital briefly became a meme stock by making a leap that apparently puzzled the company’s management as much as anybody else.

Read more: AMTD Digital: Is It All Just Sizzle or Is There Meat That Matters?

The Chinese information technology (IT) company offers a wide spectrum of digital services and solutions, with the offerings most relevant to the payments industry being digital banking, insurance and risk management solutions.

AMTD said at the time of the soaring increase in its shares, “To our knowledge, there are no material circumstances, events nor other matters relating to our company’s business and operating activities since the IPO date.”