What happened

Shares of tiny CPI Card Group (PMTS -2.60%) are soaring today, up by 16.1% as of 1 p.m. EDT,  after the manufacturer of credit cards, debit cards, and "tap-and-go" cards gave its shareholders a bit of long-awaited good news:

This OTC stock won't be limited to over-the-counter trading for much longer.

Child in parent's arms using a credit card to pay for something

Image source: Getty Images.

So what

That's right, folks, CPI Card Group is uplisting.

As CPI announced this morning, "The Nasdaq Stock Market ... has approved CPI's application for the listing of CPI's common stock on The Nasdaq Global Market under the ticker symbol 'PMTS,' effective with the opening of trading on August 5, 2021."  

What does this mean for the stock? As CEO Scott Scheirman explained in the press release, "[W]e believe trading on Nasdaq will allow a broader base of investors the opportunity to own our stock."

In particular, stock market funds and ETFs that are restricted from investing in smaller, less-liquid OTC stocks will soon be able to buy into CPI Card Group if they want to. Individual investors may be more inclined to invest in the company as well once its shares begin trading on an established stock exchange like the Nasdaq.

Now what

Of course, making the stock more "liquid" -- i.e., easier to trade -- can be a double-edged sword. It could make it easier for investors to sell CPI Card Group stock, just as it makes it easier for investors to buy it. Going forward, it will be more important than ever for CPI Card Group to demonstrate that it's a stock worth owning.

Luckily, investors may not have to wait very long to find out about that, because although the company hasn't announced an official release date for its Q2 earnings, over the past several years, those have generally come out in either the first or second week of August. And if the second-quarter news is anywhere near as good as what CPI Card Group reported last quarter -- sales and earnings growth of 20% and 37%, respectively -- investors should be pleased.