Delisting
The removal of a company's shares from a stock exchange, either voluntarily or for failing listing requirements.
What is Delisting?
Delisting is the removal of a publicly traded company's stock from a stock exchange. Voluntary delisting occurs when companies go private, merge, or are acquired. Involuntary delisting happens when a company fails to meet exchange requirements for minimum share price, market capitalization, financial reporting, or corporate governance. After delisting, shares typically trade in the over-the-counter (OTC) market with much lower liquidity.
Example
When a company's share price falls below $1.00 for 30 consecutive trading days, Nasdaq issues a deficiency notice giving the company 180 days to regain compliance. Failure to comply triggers a delisting proceeding, after which shares move to OTC markets with reduced visibility and liquidity.
Source: Nasdaq — Listing Standards