What is Delisting of Shares
5paisa Research Team
Last Updated: 01 Jan, 2025 01:13 PM IST

Content
- Introduction
- What is Delisting of Shares?
- Why Does Delisting of Shares Occur?
- The Company Does Not Meet The Stock Exchange Criteria
- The Company Applies for Bankruptcy
- Mergers / Acquisitions
- Conclusion
Introduction
Delisting a stock isn't an extraordinary phenomenon - it isn't even rare, in fact. There are times when a company just can't continue to trade its shares any longer, and that's when delisting of its stock happens. This data by StockAnalysis shows that in 2020, 70 of the major US companies got delisted from the US stock exchanges.
The reasons for a company's delisting can be many - the major one being that it fails to meet the listing criteria stipulated by the stock exchange of the region/country. A plethora of other factors are at play here, as well - mergers, for example. When the ownership of a company changes, it cannot trade under the same share name it used to.
Whatever the reason for delisting, it never has any good news - neither for the company itself nor for its shareholders. Let's discuss the meaning and implications of delisting in detail, and try to understand how to avoid investing in such stock.
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