Who Decides Which Stocks Go on the NASDAQ 100 List?


Quick Answer

The Nasdaq exchange uses its own criteria to decide which stocks enter the Nasdaq-100 Index. The index is made up of stocks of the 100 biggest non-financial companies, domestic or international, explains Nasdaq. Companies in the financial sector and ones not listed in the Nasdaq are ineligible for index listing.

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Some well-known U.S. companies in the index are Apple, Amgen, Amazon.com, eBay, Facebook and Google, notes CNBC. Some foreign companies include Baidu, the Chinese Internet giant; Garmin, the Swiss GPS company; and VimpelCom, the Dutch telecom company.

The Nasdaq lists additional criteria that must be met for inclusion into the Nasdaq-100. For example, the company must not be in bankruptcy proceedings. It needs to have a minimum of 200,000 shares traded daily. It must have been listed on the stock market for at least two years. If it is one of the top 25 percent biggest companies, then only a one-year listing in the stock market is required. The company must not have had a financial audit opinion withdrawn.

The companies in the index are constantly reviewed for continued membership in the index, explains Nasdaq. In addition to keeping the above criteria, it must maintain an adjusted market cap of at least 0.10 percent of the total market cap of the index at each month end. If it fails to do so for two consecutive months, it is removed from the index.

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