delisting: implications for shareholders?

Legacy_user · 10 June 2004 at 4:43PM

Can anyone explain to me the implications for shareholders/prices if a company is to be delisted? I bought a few shares at a ludicrously low price as a bit of a punt (I'm happy to lose a few quid as part of the learning process - it's still a cheaper hobby than photography or girlfriends) but now it looks like the company might be delisted as part of a restructuring under a new CEO.

cheerfulcat · 16 June 2004 at 1:43PM

Hi,

If the company is delisted the shares will be very difficult to trade, so essentially they are worthless. Sorry!

HTH

Cheerfulcat

Pal · 16 June 2004 at 6:00PM

I agree that they might be difficult to trade but they would certainly not be worthless. In theory the value should not change, but in practice it usually falls because you have few available buyers and those that are willing to buy will drive a harder bargain.

On the plus side, presumably the listing is being abandoned in order to improve the company meaning that the share price should rise again, although it will be difficult to ascertain whether this is happening.

I suggest you write to the chairman of the company asking for an explanation and what he thinks you should do if you wish to sell your shares.

System · 22 June 2004 at 9:44PM

Thanks for the replies. I'll think I'll sit on them as they were a 'penny-share-punt' anyway. 18 months ago they were around 125p and I bought them at less than 1p.

I won't bother the new CEO as he'll be busy making the company more profitable to make my shares go up!

I saw a suggestion from someone elsewhere that the threat of delisting (they haven't actually done it yet) may just be a ruse by the board to bring the shares down so they can make a killing. Sound's like it should be illegal?

delisting: implications for shareholders?

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