If a stock is delisted, what happends to a shareholder?

Question

Would that mean everything is lost?

Answer 1

No.

It depends why it was delisted. If it is because the company went private, then either the investor becomes an owner of private equity or he will receive some other compensation for it.

If the firm is shutting down, then if the equity still has value, there will usually be a final dividend payment made where the value is distributed to the equity holders.

If it is bought out or an LBO, then the equity holders will get a cash payment, equity in the new firm, other securities from the new firm or a combination of these.

Answer 2

Note that delisting is different than stock being cancelled (when a company emerges from bankruptcy, say), or a company being bought out, or shutting down in some form of liquidation.

Delisting simply means a stock has been removed from a particular exchange.

There are various reasons a stock may be delisted from an exchange such as entering bankruptcy, failure to meet reporting guidelines, failure to maintain an adequate stock price.

But, even if delisted, the stock will continue to trade over-the-counter, either bulletin board or pink sheets. There are still equity and ownership rights belonging to shareholders.

Answer 3

If a stock is actually delisted - meaning it has lost it's listing AND is not on an exchange - who are you going to sell it to considering there is no market for the stock? Probably if this happens - unless it goes bankrupt - it will become a bulletin board or pink sheets stock and you could sell it then.

Regarding a company closing down - inferring that it has gone out of business or bankrupt - i would think that any equity left would go to creditiors or bond holders and not stock holders.

Regarding a public company going private - technically this wouldn't be what is thought of as a delisting. The 'company' will have voted and accepted the buy out of the firm taking it public AND as result your shares will have been bought as part of this transaction.

Answer 4

You may now own a virtually worthless stock. If it was delisted it is because the loss of value warranted removal from the exchange.

Depending upon what it is you should consult your stock broker for advice. There may be, and likely are better investments you need to consider.

Answer 5

You can sell your shares anytime you want. You still have to determine the risk involved and how much money you have invested.

Answer 6

It can still be bought and sold unless its gone bankrupt. Most brokerages will let you trade stocks that have a .pk or .ob extension on them.

Answer 7

Sell your shares to someone who is dumb enough to buy them without doing any research