Company Delisting: Understanding the Impact on Your Investments

A delisting is when a stock is removed from a stock exchange. Here are the basics of the delisting and what it means to your investment.

Company Listing

In order to be listed on a stock exchange, a company has to meet certain requirements. Not every company is eligible for being listed on the New York Stock Exchange or the NASDAQ. If they want to elicit on either one of these stock exchanges, they will have to pay an application fee, as well as well over $100,000 in listing fees. In addition to paying the fees, they are going to have to meet specific requirements, such as a certain market capitalization and a minimum price per share. If they do not have enough investors, they cannot be considered for listing.

Delisting

When you are included in a stock exchange, it does not necessarily mean that you will be there forever. If your company does not continue to meet the qualifications of listing, the stock exchange can choose to remove them from the exchange.

Implications

If you are a stockholder in one of these companies, it does not mean that you cannot trade the stock anymore. You will simply have to trade it through over-the-counter exchanges or on pink sheets through your broker.