When Is Stock De-Listed from Market?
De-listing is when a company that is publicly traded on one of the stock market exchanges is removed from the exchange. A company can be de-listed for both voluntary and involuntary reasons, though it typically is an involuntary move.
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Poor Performance
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Exchanges require stocks to maintain a minimum share price--e.g., $1 for Nasdaq and the New York Stock Exchange. Those that dip below the minimum for a certain period of time may get de-listed if they cannot improve their performance.
Filing Requirements
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Companies must meet exchange guidelines for filing financial information. Those that do not meet guidelines could be de-listed, according to a 2007 article at TheStreet.com.
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Penny Stocks
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Stocks that are de-listed because of poor performance are then categorized as "penny stocks" and traded on one of the over-the-counter exchanges, such as the Pink Sheets, according to TheStreet.com.
Going Private
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A company going private is one potential positive reason for a de-listing. According to TheStreet.com, a company may choose to go private to consolidate ownership, often improving the company's financial situation.
Changing Exchanges
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Another instance in which a de-listing may not be a bad thing is if a company elects to de-list from one stock exchange so that it can be listed on a different one, according to TheStreet.com
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