(Logo image courtesy of the IIJ website.)
IIJ to Delist from Nasdaq
On February 7, 2019, Internet Initiative Japan Inc. (IIJ) announced that its Board of Directors had resolved on the same day to apply for the delisting of its American Depositary Receipts (ADRs) from the NASDAQ Stock Market (NASDAQ) and for deregistration from the U.S. Securities and Exchange Commission (SEC). (The company’s press release can be found here.)
The delisting from Nasdaq was subsequently completed on April 22, 2019. (The company’s press release at that time can be found here.)
(We have also updated our past article, “List of Japanese Companies Listed on NYSE and Nasdaq.”)
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According to the articles, the reasons cited for applying for Nasdaq delisting and SEC deregistration are:
- When IIJ listed its ADRs on Nasdaq in 1999, it was more common for internet-related companies to list in the U.S. than in Japan. However, the environment has since changed, with the internationalization of Japan’s domestic securities markets progressing and trading by overseas investors in the domestic market increasing.
- In the current situation, the trading volume of IIJ’s ADRs has decreased, meeting the criteria for deregistration.
IIJ plans to maintain its listing on the Tokyo Stock Exchange and will also maintain its ADR program through its depositary bank even after the Nasdaq delisting. Therefore, its ADRs are expected to continue trading on the U.S. over-the-counter (OTC) market.
When a company aims to list, or maintain a listing, the choice of which stock exchange will best contribute to its growth varies greatly depending on the individual company, its business characteristics, and the economic environment at the time. IIJ’s decision seems to reflect a “selection and concentration” approach to its listing strategy and IR efforts based on the company’s current stage.
Regarding what kind of companies are suited for a U.S. listing versus a domestic listing, please refer to our previous interview with Mr. Sugihara, the Nasdaq Japan Representative.
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