A Thousand Companies Delisted?

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Companies stopped being quoted on the OTC Bulletin Board. As a result the extension of their ticker symbol changed from .OB to .PK on some financial websites.

Last week hundreds of Bulletin Board stocks were apparently delisted to the Pink Sheets market. On financial websites like Yahoo Finance, stock symbols for Global Green Solutions (GGRN – $0.15) and TurboSonic Technologies (TSTA – $0.44) all of a sudden ended with “.PK”, indicating they were listed on the Pink Sheets, instead of the traditional “.OB” for the Bulletin Board.

What seemed like a negative event for many companies, was actually just a change of the quotation platform, that wasn’t caused by any action or inaction from the companies involved.

Unfortunately, as this was hardly communicated in advance, many investors were confused and some of them even sold their shares without knowing what had happened, causing many stock prices to dip.

Dually Quoted

Before the “move” most companies on the bulletin board were quoted on the trading platforms of both the OTC Bulletin Board and OTC Markets Group, the group that also quotes pink sheet companies. Because the OTC Markets Group isn’t recognized as being “Over The Counter” by some financial websites and brokers, the ticker symbol of stocks quoted on their trading platform all have the .PK extension.

The “Move”

So why the change in extension? Well, the OTC Bulletin Board was sold to the U.S. investment bank Rodman & Renshaw, late 2009. As a result, most of the market makers switched exclusively to the OTC Markets Group, which was already responsible for about 94% of all market maker quotes vs. just 6% on the OTC Bulletin Board.

As a consequence, most companies don’t have a market maker on the OTC Bulletin Board anymore, and now trade exclusively on the OTC Markets Group.

OTC Markets Group

OTC Markets Group Inc. owns and operates the world’s largest electronic marketplace for broker-dealers that provides investors with prices in over 10,000 OTC securities. OTC Markets divides its OTC securities into three tiers.

  • OTCQX is the top tier of the OTC market. Exclusively for companies that meet the highest financial standards and undergo a qualitative review.
  • OTCQB is the middle tier of the OTC market. OTCQB companies are reporting with the SEC or a U.S. banking regulator, making it easy for investors to identify companies that are current in their reporting obligations. There are no financial or qualitative standards to be in this tier. Both Global Green Solutions and TurboSonic Technologies belong to this tier.
  • OTC Pink is the third tier of the OTC market. OTC Pink is the speculative trading marketplace that has no financial standards or reporting requirements.

Conclusion

According to the OTC Markets Group almost 1,000 publicly traded companies have moved from being dually quoted to being quoted exclusively on the OTC Markets Group in the past 30 calendar days.

Those companies still meet the same standards as they did before. Global Green Solutions and TurboSonic Technologies are still U.S. registered and fully reporting with the U.S. Securities and Exchange Commission.

Basically, except for the .OB extension on some financial websites like Yahoo Finance, nothing has changed. For the time being (we expect Yahoo will adapt shortly) we advice you to look up quotes on the OTCMarkets.com website as you’ll immediately see if this a fully reporting company or not.


For important disclosures, please read our disclaimer.

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