What is Delisted on the Exchange and Cryptocurrency Market?

When it comes to cryptocurrencies and the stock market, new investors may wonder what it means when shares are taken off the exchange. In this article, we’ll try to answer briefly what “delisting” is and why it’s important.

What Does “Delisting” Mean?

Most of the time, when people say “delisting,” they mean “taking a company off of the stock exchange.” Delisting is the process of taking company shares out of circulation on this trading platform. Delisting can be done not just with shares, but also with depositary receipts, tokens, and coins. Let’s try to figure out what to do if your shares are taken off the market. It depends on how the removal from the list takes place.

The exchange could also temporarily stop trading in securities instead of taking them off the list. Most of the time, this happens during corporate events or at the request of the regulator, like if he thinks the company is breaking trading or corporate governance rules. The delisting process is sometimes started by the issuing company itself. There could be more than one reason.

For example, one or more key shareholders may want to get the biggest share of the company. In this case, the amount of trading is so small that it has no economic meaning. A company may also decide not to trade on the exchange if it is bought by a private joint-stock company and then restructured.

Also, companies can merge. This happens when each issuer voluntarily asks for its shares to be taken off the stock market so that the new company can go public in the future.

What delisting is for investors

What should investors do if their shares are going to be taken off the stock market? Shares can be taken off the stock market for many different reasons. For example, if the company is going out of business, this is the worst case scenario because they have the fewest ways to save their money. Then, after all of the company’s debts have been paid, the owners of the shares get their money. But once the company pays off its debts, it often doesn’t have much left to give to its shareholders.

Most of the time, the best thing to do is sell the securities as soon as you find out that the shares will be taken off the stock market. The faster you sell these papers, the more you can get for them. Most of the time, when people hear that a stock is being taken off the market, they sell it and its value goes down.

But if the company that owns the stock decides to delist it, shareholders still have good options. One option is to wait for the “offer.” It comes before delisting if it is done on its own. With this kind of offer, everyone will be able to sell their shares for no less than the average price over the last six months.

If one shareholder owns 95% of the shares, he has the right to force the other shareholders to sell their shares to him. He also has to honor the right of minority shareholders to sell their shares to him.

During mergers and acquisitions, delisting is the best thing for shareholders to do. Getting a good offer from people who want to buy the company is the key to buying shares in a company that could be taken over.

You can also keep the shares, which is the third choice. If the company always pays dividends, it makes sense. Even though the shares are no longer traded on the exchange, the person who owns them still has all rights to them, including the right to receive dividends. So, if the company has a good track record of paying dividends and looks like it will continue to do so, it would make sense to keep the shares for yourself.

But with this choice, it’s important to remember that it’s hard to sell securities that aren’t traded on the stock exchange. You can do this with the help of a broker over the phone, or you can do it on your own in the over-the-counter market.

What does Delisting mean for the Cryptocurrency Market?

In the case of crypto assets, delisting is the process of removing one or more crypto assets from the list of available financial instruments on the exchange. In this case, the people in charge of running the centralized platform cut off the project participants’ ability to trade coins. This is done on purpose, but for certain reasons, such as the fact that the asset isn’t very popular or because there aren’t many trades.

Even when a listing is made for an asset, the administration does not promise that the coins will always be on the site. So, taking something off a list is a perfectly legal thing to do. After this is done, participants won’t be able to buy or sell this cryptocurrency. The risk is that the user’s coins might not be able to be moved to another wallet or traded for another asset.

So, the administration is trying to let people know about the delisting ahead of time so that investors can get rid of the asset quickly and lose as little money as possible. Keep in mind that when an asset is taken off the list, it automatically means that it has low liquidity and isn’t very popular. So, the mere appearance of this kind of information causes a sharp drop in the exchange rate and a loss of capital.

So, it’s up to the user to figure out how good his assets are and get rid of the ones that aren’t good. Also, this needs to be done before the delisting announcements are made.