Reasons to delist a listed Co.

Replies to This Discussion

Permalink Reply by Anthony Smith on July 29, 2010 at 9:49pm

The simple answer is it depends. Here's the links to the 2 main exchanges which spell out their individual requirements:

NYSE: http://nysemanual.nyse.com/lcm/

NASDAQ: http://nasdaq.cchwallstreet.com/NASDAQTools/PlatformViewer.asp?sele...

On the other hand Pink OTC issues have basically no requirements to trade. It's not uncommon to see bankruptcy, illiquidity, or regulatory halts prevent a company from trading (thus leading to delisting). Stocks trading Pink OTC are generally penny stocks and often are delinquint on their SEC filings. A company usually trades Pink OTC if it has been delisted or has failed to meet the listing requirements of the NYSE and NASDAQ

From the issuer's perspective, a company may choose to delist itself if either:
A) the burdon of meeting listing requirements is too much (audited financials, SEC filings, & listing fees cost $$)
B) the company is acquired or merges with another company
C) or if the board votes to go private and there is a mandatory tender or mandatory reorg

Hope this helps...maybe someone else could add something that I may have missed or failed to consider.

• ▶ Reply

Permalink Reply by Gregg Kimmer on August 16, 2010 at 9:13am

Anthony did a good job answering this question.

I'd say a major reason why companies get delisted is voluntary. With SOX, pressure from shareholders and government scrutiny, many companies find it's not worth the cost (financial or opportunity) to go public or to stay public.

• ▶ Reply

Permalink Reply by Amit Keyal on August 16, 2010 at 11:31am

The reasons for delisting of shares can be like:
Holding public shareholding less than as prescribed by the SEBI.
Violation of any condition prescribed for continous listing

• ▶ Reply

Permalink Reply by Shitikantha Baitharu on August 16, 2010 at 12:46pm

for listing of a company in stock exchange there are various criteria. like minimum amount of share capital.
minimum no. of shareholders etc failing to maintain which may result in delisting of company. the below link gives the detail requirement for listing the "Bombay stock exchange". A company which are listed also have to maintain these requirement. failing of which may delist the company from the exchange.

http://www.bseindia.com/about/abintrobse/listsec.asp

• ▶ Reply

Permalink Reply by Wee Keng Yip on August 18, 2010 at 10:22am

There could be many reasons leading to a company being listed. It could be due to failure in meeting the continuing listing obligations, undervalued, a take-over target or even being de-listed due to poor financial position and problems on its going concern status.

• ▶ Reply

Permalink Reply by BALAKRISHNAN R P on August 19, 2010 at 3:28am

Wee:
Covered aptly in two sentences. Predators are doing their rounds and listing costs are prohibitive. Also, advantages of de-listing include benefits like hiding the key financials from regulators and competitors.

• ▶ Reply