A Nasdaq deficiency notice means a stock's closing bid stayed below $1.00 for 30 business days in a row. The company usually gets 180 days to close at $1.00 or higher for 10 straight business days, and some get a second 180 days. You still own your shares; if the stock is delisted, it typically moves to OTC trading.
- A deficiency notice is a warning, not a delisting. The stock keeps trading on Nasdaq during the compliance period.
- The usual cure is closing at $1.00 or higher for at least 10 consecutive business days within 180 calendar days.
- Nasdaq Capital Market companies may qualify for a second 180-day period if they meet the other listing standards.
- A reverse split in the past year, or a price of $0.10 or less for 10 business days, can mean no grace period at all.
- Nasdaq's proposed $5 million minimum value rule was not in effect as of October 7, 2026.
- If a stock is delisted, you still own your shares. Trading usually moves to the OTC market.
Exceptions apply: a reverse split in the past year, or a price of $0.10 or less for 10 business days, can mean no grace period at all. Details below.
You saw a headline saying a stock you own got a Nasdaq deficiency notice. This guide explains what that notice means, how the compliance timeline works, which rules changed in 2024–2026, and what happens to your shares if the stock is delisted.
Rules are current as of October 7, 2026. We update this page when Nasdaq or the SEC changes them.
What is a Nasdaq deficiency notice?
A deficiency notice is a letter from Nasdaq telling a listed company that it no longer meets one of the exchange's listing rules. For low-priced stocks, the most common one is the minimum bid price rule: Nasdaq-listed common stock must keep a closing bid price of at least $1.00. That's Rule 5550(a)(2) on the Nasdaq Capital Market and Rule 5450(a)(1) on the Global and Global Select Markets. The rule doesn't apply to warrants, rights or convertible debt.
A company falls out of compliance when its closing bid price stays below $1.00 for 30 consecutive business days (Rule 5810(c)(3)(A)). Companies usually announce the notice in a press release or an SEC filing, and that's the headline most traders see.
A deficiency notice is not a delisting
The stock keeps trading on Nasdaq during the compliance period. The notice is a warning with a clock attached, not a final decision.
The Nasdaq delisting timeline, step by step
The table below shows the standard path. Two shortcuts can skip the grace periods entirely; they're covered in the next section.
| Step | When | What happens | Still trading on Nasdaq? |
|---|---|---|---|
| 1. Trigger | Closing bid under $1.00 for 30 business days in a row | Nasdaq sends a deficiency notice; the company announces it | Yes |
| 2. First compliance period | Day 0 to day 180 (calendar days from the notice) | Cure = at least 10 business days in a row closing at $1.00 or higher | Yes |
| 3. Second compliance period (if eligible) | Day 180 to day 360 | Capital Market only; must meet other standards and commit to a cure (often a reverse split) | Yes |
| 4. Delisting Determination | After day 180 (not eligible) or day 360 (failed second period) | Company can request a hearing | After a second period: no. It's suspended and generally trades OTC. Otherwise a hearing request ordinarily keeps it trading. |
| 5. Hearings Panel | Up to 180 days from the Determination, where allowed | Panel can grant more time or reinstate | Depends on step 4 |
| 6. Delisting | Form 25 filed with the SEC | Removal effective 10 days after filing | No. Trades OTC, if a market exists |
The first 180 days
After a company falls out of compliance, Nasdaq gives it an automatic compliance period of 180 calendar days, counted from the date Nasdaq notifies the company. To regain compliance, the stock must close at $1.00 or higher for at least 10 consecutive business days during that period. Nasdaq staff can, at its discretion, require a longer streak (Rule 5810(c)(3)(H)).
The second 180 days (who qualifies)
A company listed on the Nasdaq Capital Market, or one that transfers to it, can get a second 180-day period. On day 180 of the first period it must meet the market value of publicly held shares requirement for continued listing and all other Capital Market initial listing standards except the bid price. It must also tell Nasdaq it intends to fix the price, including by a reverse stock split if needed.
The second period is not automatic. A company won't get it if Nasdaq doesn't think a fix is possible, or if the company has publicly said it no longer meets the listing criteria.
The Delisting Determination and the hearing
If the company isn't eligible for a second period, or fails to fix the price during it, Nasdaq issues a Delisting Determination. The company can appeal to a Nasdaq Hearings Panel, and then to the Nasdaq Listing and Hearing Review Council. Where a hearing request pauses the suspension, the Panel may grant up to 180 more days from the date of the Determination.
Since a 2025 rule change, a company that already used its second 180-day period no longer stays on Nasdaq during its appeal. Its stock is suspended and generally trades over the counter (OTC) while the Panel decides.
The rule changes that shortened the runway (2024–2026)
If you learned these rules a few years ago, some of what you know no longer applies.
A reverse split in the last year means no grace period
Under a change the SEC approved in January 2025, if a stock falls below the $1 requirement and the company did any reverse stock split in the prior year, it gets no compliance period. Nasdaq issues a Delisting Determination right away. This applies even if the company was in compliance when it did the split. In this case a timely hearing request ordinarily still pauses the suspension, and the Hearings Panel may grant time.
Example (hypothetical): Company X does a 1-for-10 reverse split in March. By November its closing bid has been under $1.00 for 30 business days again. Because the split was less than a year ago, there's no new 180-day period, and Nasdaq moves straight to a Delisting Determination.
The $0.10 rule
If a stock closes at $0.10 or less for 10 consecutive business days, Nasdaq issues a Delisting Determination and suspends trading, with no compliance period. Under a change the SEC approved on December 5, 2025, this applies whether or not the company is already in a compliance period, so a fast fall from above $1 to under $0.10 can trigger it without a regular notice first. A hearing request doesn't stop this suspension.
Reverse splits that break another rule
Since an October 2024 change, a reverse split that lifts the price but pushes the company below another numeric requirement doesn't count as a fix. For example, a split that leaves too few publicly held shares or shareholders means the company isn't considered compliant with the bid price rule, and it gets no separate grace period for the other requirement.
Nasdaq also requires companies to notify it 10 calendar days before a reverse split. In practice, a company has to finish its split early enough to get 10 business days at $1.00 or higher before its deadline.
Appeals no longer keep the stock on Nasdaq (after the second period)
As shown in step 4 of the timeline, a company that used its second 180 days and still failed is suspended from Nasdaq while it appeals. The Hearings Panel can still reinstate it if the company regains compliance, for example by doing a reverse split and then closing at $1.00 or higher for at least 10 consecutive business days while trading OTC.
The proposed $5 million rule: is it in effect?
Nasdaq has proposed that listed companies keep a Market Value of Listed Securities (MVLS) of at least $5 million. A company below that level for 30 consecutive business days would face immediate suspension and delisting, with no cure period.
As of October 7, 2026: not in effect. SEC staff approved the rule on July 22, 2026. The approval was automatically stayed on July 29, 2026 after petitions for review were filed. On September 11, 2026, the full Commission granted review and kept the stay in place "pending further order of the Commission." Written statements were due October 6, 2026.
What happens to my shares if a stock is delisted?
You still own them
Delisting doesn't erase your shares. You keep your ownership and legal rights; the stock just no longer trades on the exchange.
Trading usually moves to the OTC market
Delisted stocks often trade over the counter, meaning through broker-dealers rather than on an exchange. Expect fewer buyers and sellers, wider bid-ask spreads, and possibly less company information. Not every broker supports every OTC stock, and some may limit buying, so check your broker's help pages.
A halt, a suspension and a delisting are different things: a halt is a short pause in trading, a suspension stops trading on Nasdaq, and a delisting removes the listing.
Delisting sometimes comes alongside bankruptcy, and in a bankruptcy common shareholders can recover little or nothing.
The paperwork: Form 25 and timing
A delisting becomes effective 10 days after a Form 25 is filed with the SEC. Withdrawal of the stock's registration takes 90 days, or less if the SEC decides. Under the 2025 rules, a company suspended after a failed second compliance period will often already be trading OTC during its appeal.
Can a delisted stock come back?
It's possible, but it isn't guaranteed. During an appeal, the Hearings Panel can reinstate a company that regains compliance. Otherwise a company would need to meet Nasdaq's initial listing standards again.
What to check when a stock you hold gets a notice
These are questions to look into, not recommendations:
- When was the notice dated, and which deadline applies: the first or the second compliance period?
- Has the company done a reverse split in the past 12 months? How close is the price to $0.10?
- Is the company asking shareholders to approve a reverse split? Is there a financing or offering that could add shares? See how offerings, dilution and warrants work.
- Is it listed on the Capital Market (eligible for a second period) or on the Global or Global Select Market?
For the latest market headlines, see the Trade Conquest News page.
How NYSE's $1 rule compares
The same "under $1" headline can mean different deadlines depending on the exchange.
| Nasdaq | NYSE | |
|---|---|---|
| Trigger | Closing bid below $1.00 for 30 consecutive business days | Average closing price below $1.00 over 30 consecutive trading days |
| Cure period | 180 calendar days, plus a possible second 180 days (Capital Market) | Six months; the company must tell NYSE within 10 business days that it intends to cure |
| Cure test | Closing bid of $1.00 or higher for at least 10 consecutive business days | On the last trading day of any month, both a $1.00 closing price and a $1.00 average over the prior 30 trading days |
| Reverse split limits | No compliance period after a reverse split in the prior year | No cure period after a reverse split in the prior year, or reverse splits totaling 200-to-1 or more over two years |
| Low-price trigger | $0.10 or less for 10 consecutive business days: immediate delisting determination and suspension | Closing price below $0.25 on any trading day: immediate suspension and delisting proceedings (approved Aug 14, 2026) |
Frequently asked questions
What does a Nasdaq deficiency notice mean?
It means Nasdaq has told the company it no longer meets a listing rule. For low-priced stocks, it's usually the $1 minimum bid price: the closing bid stayed below $1.00 for 30 consecutive business days. The stock keeps trading on Nasdaq while the company tries to fix the problem within its compliance period.
How long does a company have to get back above $1?
Usually 180 calendar days from the notice. Companies on the Nasdaq Capital Market (or that move there) may get a second 180 days if they meet the other listing standards and tell Nasdaq they plan to fix the price. There are exceptions: a reverse split in the past year or a price of $0.10 or less can remove the grace period.
How does a company regain compliance with the $1 rule?
By closing at $1.00 or higher for at least 10 consecutive business days during the compliance period. Nasdaq staff can require a longer streak. Many companies use a reverse stock split to lift the price, but under current rules a split in the prior year can mean no new grace period if the price drops again.
What is the Nasdaq $0.10 rule?
If a stock closes at $0.10 or less for 10 consecutive business days, Nasdaq issues a delisting determination and suspends trading, with no compliance period. Since a change approved in December 2025, this applies whether or not the company was already in a compliance period, and an appeal doesn't stop the suspension.
What happens to my shares if a stock is delisted from Nasdaq?
You still own them. Delisting removes the stock from the exchange, but it doesn't cancel your shares. Trading often moves to the over-the-counter (OTC) market, where there are usually fewer buyers and sellers and wider price gaps between bids and offers. Some brokers limit trading in certain OTC stocks.
Can a company appeal a Nasdaq delisting?
Yes, to a Nasdaq Hearings Panel, and then to the Listing and Hearing Review Council. But since 2025, a company that already used its second 180-day period is suspended from Nasdaq during the appeal, and its stock generally trades OTC until the Panel decides.
Is Nasdaq's $5 million minimum value rule in effect?
Not as of October 7, 2026. SEC staff approved it on July 22, 2026, but the approval was automatically stayed after petitions for review. On September 11, 2026, the full Commission agreed to review it and kept the stay in place. Check the SEC's website for the latest status.
Can a delisted stock come back to Nasdaq?
It can happen, but it isn't common and it isn't guaranteed. During an appeal, the Hearings Panel can reinstate a company that regains compliance. Otherwise a company would need to meet Nasdaq's initial listing standards again.
Stay on top of small-cap moves
Deficiency notices, reverse splits and delistings can change a low-priced stock's situation quickly. Knowing the rules helps you read those headlines calmly.
Sources
- SEC order approving Nasdaq SR-NASDAQ-2024-045 (reverse split within one year; appeals after the second period), Jan 17, 2025
- SEC order approving Nasdaq SR-NASDAQ-2025-065 (the $0.10 rule), Dec 5, 2025
- SEC order approving Nasdaq SR-NASDAQ-2024-029 (reverse split causing another deficiency), Oct 7, 2024
- Nasdaq SR-NASDAQ-2024-068 (10-calendar-day reverse split notice to Nasdaq)
- SEC order approving Nasdaq's $5 million MVLS rule (SR-NASDAQ-2026-004), July 22, 2026
- SEC order granting review and keeping the MVLS approval stayed, Sept 11, 2026
- SEC order approving NYSE SR-NYSE-2024-48 (Section 802.01C; reverse split limits), Jan 15, 2025
- SEC order approving NYSE SR-NYSE-2025-43 ($0.25 minimum trading price), Aug 14, 2026
- SEC Form 25 instructions
- Nasdaq Listing Center rulebook
- FINRA: A Look at Over-the-Counter Equities Trading
- SEC staff study: Outcomes of Investing in OTC Stocks
- Investopedia: What happens to shares when a stock is delisted
- Robinhood: Why can't I buy or sell some stocks?
Not financial advice. This article is for educational purposes only and is not financial, investment or legal advice. Listing rules change; check the cited Nasdaq, NYSE and SEC sources for the latest version. Trading low-priced stocks carries a high risk of loss. Trade Conquest does not recommend buying or selling any security.