Blue chip stocks on the NASDAQ?

[Boris B]

Okay, at one point I heard that there was a ranking (tacit or formal) of the stock exchanges in the U.S. At the top is the New York Stock Exchange, then comes the American Stock Exchange, and then come the over-the-counter stops which are sold in drug stores. Just kidding about the drug stores. Then somebody told me that the National Association of Securities Dealers Automated Quotations was kind of a tracking thing for over-the-counter stocks - sort of like the Dow for the little folks.

Then I heard that Cisco Systems sent the NASDAQ tumbling. Little folks? Cisco Systems? Isn't Cisco like the biggest company in Christendom? I would have thunk this would put it among the "blue chips" on the NYSE ... am I to believe it's an over-the-counter stock? Or is some of its stock sold over the counter, and some on one or both of the exchanges? Or, can a stock that's not actually over-the-counter affect the NASDAQ anyway (by osmosis?)? Or, does the NASDAQ cover stocks that aren't over-the-counter?

When a company gets big enough, can it get promoted from one bourse to another? Or demoted if the company shrinks?

[yabob]

Anything traded on the NASDAQ now is not what people mean by OTC. It started out as an OTC quote system, but became simply "The NASDAQ Stock Market" in 1990. At this same time, the OTCBB was created for stocks not listed on the NASDAQ.

NASDAQ's big innovation was that it was a totally electronic, rather than floor-based, market.

As the NASDAQ gained parity with the other markets, many up-and-coming companies, particularly high-tech, chose to list on the NASDAQ instead of the NYSE or AMEX. Some of them, like Cisco, Microsoft, Intel, Sun and Oracle became large companies.

AMEX merged with NASDAQ a couple years ago.

Companies can and do get delisted from a given exchange. There is no system of them being "relegated" from one exchange to another. They can try to switch exchanges if they want to, but it doesn't happen often.

[RealityChuck]

When a company gets big enough, can it get promoted from one bourse to another? Or demoted if the company shrinks?

Companies apply to be listed on either the NASDAQ or NYSE. There are various financial minimums they have to meet to be listed. The NYSE has higher minimums than NASDAQ. Thus, a smaller corporation will find it easier to meet NASDAQ requirements than NYSE.

If a company falls below certain minimums, it is delisted and its stock is no longer traded on the exchange. I believe these minimums are below what's necessary to be listed on the exchange in the first place. If an NYSE company fell below the requirements, it would probably be in such bad shape that it couldn't join NASDAQ.

If you're in NASDAQ, you can move to the NYSE once you meet NYSE requirements. The NYSE has already set aside the stock symbols "M" and "I" just in case Microsoft or Intel want to make the jump. So far, they're not interested. (NASDAQ symbols are generally 4 letters while NYSE are 3 or less. Having a single-letter symbol is something of a status symbol.)