Camarillo Firm Joins New Amex Market
A Camarillo company, Advanced Photonix Inc., is among the first 21 fledgling businesses to abandon NASDAQ and have their shares listed on the American Stock Exchange’s new Emerging Company Marketplace.
The new Amex market, which begins trading Wednesday, is aimed at listing start-up companies that otherwise would not meet the financial standards necessary for listing on the Amex’s main exchange, the New York Stock Exchange or the National Market System (NMS), which is the top tier of the NASDAQ electronic over-the-counter market governed by the National Assn. of Securities Dealers.
Because such stocks are little-known and thinly traded, they ordinarily have to settle for listing on NASDAQ’s lower tier, which gets a separate stock table in newspapers nationwide that provides investors with far less trading data than that available for NMS stocks.
Indeed, the stock of Advanced Photonix--which makes photodetectors, or light sensors--currently trades on NASDAQ’s lower tier and its volume last week totaled only 28,200 shares.
The Amex is trying to attract those stocks by lowering its typical listing requirements, which involve such criteria as a company’s total assets, its profit history and the total market value of its shares.
In doing so, the Amex hopes to cut into the success of NASDAQ, which carries 4,100 issues compared with only 1,055 currently on the Amex, and to curb the steady erosion in the amount of trading volume that the Amex has handled in recent years.
But whether the Amex’s new market succeeds in the long term is an open question, because it gave Advanced Photonix and the other 20 emerging companies free admission to the new market and the option of later returning to NASDAQ. Additional companies that want to join the new market will be charged $5,000.
When the new market was announced last fall, several San Fernando Valley companies now traded on NASDAQ said they had no interest in switching to the Amex.
Nonetheless, the Amex believes more companies will eschew NASDAQ and join the new market because, among other things, the Amex provides them with “increased visibility in the financial community,” which will help them raise more cash in the financial markets in the future.
The Amex also contends that companies listed on its exchange provide investors with a better deal because the Amex’s auction system on a trading floor provides narrower spreads between bid and asked stock prices than that available on NASDAQ.
Indeed, the auction system was one of the factors cited by Thomas T. Lewis, Advanced Photonix’s president, for joining the Amex’s new market.
But NASDAQ spokesman Bob Ferri said there is no price advantage to the auction system, and said NASDAQ’s benefits are evidenced by the 1,480 lower-tier NASDAQ companies that declined to join the Amex’s new market despite the free admission.
