What is delisting

Delisting refers to the removal of a company’s securities (such as shares) from a stock exchange, making them no longer available for trading on that exchange. After delisting, the company’s shares are not traded publicly and can only be bought or sold through over-the-counter (OTC) transactions, if at all.

Types of Delisting:

• Voluntary Delisting: Initiated by the company, usually to go private, reduce compliance costs, or due to strategic reasons.
• Compulsory Delisting: Enforced by the stock exchange due to non-compliance with regulations, failure to meet listing requirements, or other reasons.

Impact on Shareholders:

• In the case of voluntary delisting, the company typically provides shareholders with a buyback offer at a determined price.
• After delisting, liquidity is significantly reduced, and shareholders may face challenges in selling their shares.