An unknown NYSE exception

Author: | Published: 1 May 2008

In recent weeks, several companies facing the need to raise money quickly have relied on a previously little used exception to the New York Stock Exchange's shareholder approval rules to issue substantial amounts of capital without shareholder approval. What's going on here?

Generally speaking, New York Stock Exchange (NYSE) rules require a listed company to obtain shareholder approval prior to issuing common stock, or securities convertible into common stock, representing 20% or more of the company's outstanding common stock or which would result in a change in control of the company. Nasdaq has similar shareholder approval requirements. These rules are designed to give shareholders a voice in transactions where...