Epigen Inc. has announced that it is leaving the NASDAQ tomove to the AMEX's new Emerging Company Marketplace.
The Wellesley, Mass., company (NASDAQ:EPIG), which isdeveloping products for the diagnosis, monitoring andtreatment of cancer patients, said it will begin trading today onthe ECM under the symbol "EPN.EC." NASDAQ trading will beended after a transition period, said James Mongiardo,company president.
In a move aimed at stimulating NASDAQ defections, the AMEXearlier this month announced the formation of ECM forcompanies that don't currently meet the exchange's listingstandards but meet minimum standards of shareholder equityand are determined by a selection committee to be potentialgrowth stocks.
Mongiardo said Epigen was attracted by ECM's plans to funneltrades through a market specialist and its rules on shorttrading. "We're a biotech company, and any biotech companywill have a lot of volatility in the stock," he said. "We believethat by having a market specialist, we'll have a more orderlymarketplace. In addition, the rules are clear that you can'tshort on a downtick."
"The tick test is used to attract companies who don't like shortselling in their stock," said Gene Finn, NASDAQ vice presidentand chief economist. "The SEC has done studies showing it isn'teffective, but issuers think it is. While it may narrow thespread a little bit, it doesn't affect the amount of short interestin a stock. It just reorders trades."
NASDAQ has proposed a bid test that members are voting onthis week, said Finn. Under the proposal, if the last change inthe bid price of a stock is down, the stock can't be sold short ator below the bid. The proposal has been in the works for acouple of years and isn't a response to the ECM, he said.
NASDAQ uses a market maker system with an average of 11market makers per stock. "There's no evidence to say thathaving a market specialist creates a more orderly market," saidspokesman James Spellman. -- KB
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