What is Delisting?

Delisting can take place in a voluntary or involuntary manner. Also, it typically ends up with the company discontinuing procedures, declaring bankruptcy, seeking to become private, or failing to meet the listing requirements.

There is a variety of reasons as to why projects get delisted, a few of such are the absence of protocol development, dangerous acts, no business and customer engagement, faulty network, or lack of regular trading activity.

Burger King, for example, voluntarily delisted from the New York Stock Exchange in 2010. A private takeover by 3G Capital triggered the delisting. Two years later, the private corporation was relisted and traded again before merging with a new firm that is now traded on the Toronto Stock Exchange.

Additionally, prior to performing a full examination, the world's largest cryptocurrency exchange delisted RCN & WPR, OST projects.

Even though it only happens in exceptional circumstances, companies are able to ask to get their shares re-listed after they solve the problem and follow the listing terms. Investors usually are not sure about relisting a company, and the success during the second term might be temporary.

Despite the fact that there are organizations that get delisted without violating the major rules, the concept safeguards markets from being submerged with poor securities from issuers who might be coming to the end of their life loop.

Exchanges are working on lowering the systemic danger linked with the market and protecting investors by making sure that all issuers comply with precise regulatory terms.

After being delisted, the asset can’t be bought or sold on an exchange. On the other hand, if an organization becomes private or is bought, this may be a sign that it has delisted voluntarily. However, if the company doesn’t manage to meet the listing requirements that are set out by exchanges, it is delisted involuntarily.

Besides, listing requirements are often considered to be complex, and several issuers, as well as securities, might have a particular set of rules. 

In general, these include timely submission of financial statements, a stock value above a particular level, an acceptable number of shareholders, a minimum market capitalization barrier, or certain revenue, gains, cash flow, and trading activity requirements.

Delisting typically has reasonable ramifications. Investors find it more difficult to assess and acquire business shares that are not listed on major exchanges. This means that the corporation will not issue fresh stock to the market to support its new business endeavors.

Looking from a crypto perspective, if a coin gets delisted, all of its trading sets are deleted from the cryptocurrency exchange. Nevertheless, investors who have previously invested in the delisted project are given a deadline to retrieve their funds, after which the crypto project is no longer accessible in any format on that cryptocurrency exchange.