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.

Your brokerage firm (Scottrade, Etrade, etc.) or your post office will keep you informed of any special changes or actions you must take but usually, no action is needed on your part. Your shares will automatically convert into the new ticker symbol traded on the Nasdaq or major exchange.

Traders call this a jumper. Your shares will gain in value and they will automatically start trading on the NASDAQ.

If any change in the ticker symbol takes place, your brokerage firm (i.e. ETrade, Scottrade, etc.) will contact you via your trading console and/or by regular mail.

Time for some brutal honesty. You are George Bush stupid if you are investing in OTC stock you think will go to the NASDAQ.

Slick con artists and their publishing companies will try and sell you on some alert service that supposedly has a guaranteed track record at picking jumpers but they are lying. Every last one of them.

I’ve met thousands of traders over the years and not a single trader made money at regularly picking jumpers.

Time for another dose of reality. Drink up. It doesn’t cost that much more for a listing on a major exchange as it does on the OTCBB. If the company was such a good company, selling such a hot product, that had this great potential to jump from the OTC to the Nasdaq, then why didn’t they just list on the Nasdaq in the first place? Hmmmmm? The main different between the two listings is not money, but the additional reporting requirements. Companies that list on the OTCBB don’t want to disclose to investors what’s really going on behind the PRs and they sure as hell don’t want to provide this information on anything remotely close to a timely and regular basis.

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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.

Plus, think about this. The primary reason for investing in OTCBB was to get stocks cheap. Now that we are at a market bottom, many good companies listed on the major exchanges are at crazy OTCBB prices! Plus there’s a lot less risk because stocks on the major exchanges have stricter disclosure and reporting laws they must follow than stocks listed on the OTCBB. So what is the advantage to the OTCBB at this present time? None.

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