Nasdaq 100 Changes Listing Rules to Woo Facebook IPO

Monday, 16 Apr 2012 | 1:59 PM ET
A sign with the 'like' symbol stands in front of the Facebook headquarters in Menlo Park, California.
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A sign with the 'like' symbol stands in front of the Facebook headquarters in Menlo Park, California.

Facebook wants to be a blue chip, so it can get into as many portfolios as possible.

Nasdaq is helping it get there.

Late Friday after market close, Nasdaq issued an under-the-radar press release announcing changes to how a company gets into its Nasdaq 100 index – changes that, according to a person familiar with the matter, were a key component in Facebook’s choosing to go public on the Nasdaq instead of the New York Stock Exchange.

Previously, a company had to trade – or what exchanges call “season” as an issuer – for two years, except in two cases: Companies geared toward the biotech index only needed to trade for six months, and companies spun out of long-traded tickers would see their previous trading considered.

Now, that time period is slashed, Nasdaq said: “With the new methodology, a security must have seasoned on NASDAQ, NYSE or NYSE Amex for at least three full months (excluding the first month of initial listing) based on current month-end data. The index eligibility changes will be implemented on Monday, April 23, 2012."

Nasdaq 100 Changes Listing Rules to Woo Facebook IPO
Nasdaq is adjusting the listing requirements for how long a company has to be a "seasoned" trader. This was a key component in winning the Facebook listing. CNBC's Kayla Tausche looks at the changes.

Representatives for Nasdaq were unable to be reached for comment.

This comes alongside news that Texas Instruments will replace First Solar on the index. Texas Instruments' stock has soared since switching from the New York Stock Exchange last year. Shares of First Solar, on the other hand, have continued a precipitous decline – losing so much value that the company has a tiny fractional weight on the index.

With Facebook’s expected float of at least $5 billion, it would appear to be a shoo-in for the index – once it’s “seasoned” enough.

email: tech@cnbc.com


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