Delistings are common and can be voluntary (as is the case with Didi) or involuntary. Most often, a stock delists from an exchange when it ceases operations due to a bankruptcy filing or takeover. Often times, stocks are delisted from an exchange when they no longer meet the listing requirements.
Full Answer
Should you buy Didi stock?
Dec 10, 2021 · Chinese ride-hailing app Didi announced last week that it would delist from the New York Stock Exchange and pursue a listing in Hong Kong. Delisting means a Chinese company traded on an exchange —...
Is Didi global stock a buy?
Nov 26, 2021 · It's unclear what would happen to your Didi stock Bloomberg first reported that China wants Didi to either list on Hong Kong, which is …
When is Didi delisting?
8 hours ago · It fell into the penny stock category from an all-time high of approximately $18. DiDi announced its delisting plans from the NYSE at …
How did Didi get in trouble with data regulators?
Dec 07, 2021 · Didi lost 22.18% of its value on Dec. 3 after the ride-hailing firm said it would delist from the New York Stock Exchange (NYSE). Bloomberg initially reported on the rumors a …
What happens to Didi shares when delisted?
Didi will organise a shareholders meeting, allowing them to vote on the delisting plan. What will happen to Didi's shares? “If Didi delists, one of the possible outcomes for the investors would be a share transfer,” Dechert's Chan said.Feb 17, 2022
Will Didi stock be delisted?
(Bloomberg) -- Didi Global Inc. is preparing to delist from the New York Stock Exchange, after its initial public offering there last year drew the wrath of Beijing. The Chinese ride-hailing giant said it plans to list in Hong Kong instead, allowing existing shareholders to convert their holdings in the company.Mar 10, 2022
What happens to my investment if a stock is delisted?
You don't automatically lose money as an investor, but being delisted carries a stigma and is generally a sign that a company is bankrupt, near-bankrupt, or can't meet the exchange's minimum financial requirements for other reasons. Delisting also tends to prompt institutional investors to not continue to invest.Mar 7, 2022
What happens to Chinese stocks if delisted?
If any delisting actually happens, the fund won't be able to switch to the Hong Kong shares like other funds. But again, that would be at least two years away. Invesco says it will “fully comply” with the sanctions when the day comes.Mar 18, 2022
Is NIO in danger of being delisted?
Your Takeaway on NIO Stock Nio's delisting risk is modest at this time. Investors should care more about the company's path to profitability. When it gets there this year at the earliest, shareholders may hold the stock as it lists on an Asian exchange.Feb 25, 2022
Can a delisted stock come back?
Many companies can and have returned to compliance and relisted on a major exchange like the Nasdaq after delisting. To be relisted, a company has to meet all the same requirements it had to meet to be listed in the first place.
How do I sell delisted stock?
If a company is delisted, you are still a shareholder, to the extent of a number of shares held. And yet, you cannot sell those shares on any exchange. However, you can sell it on the over-the-counter market. This means you can look for a buyer outside the stock exchange.Mar 21, 2022
What are the benefits of delisting?
Following are the advantages.Delisted firms do not have to publish its annual reports. ... Private companies are not subject to a minimum listing limit anymore.Business cut expenses—listing fee and annual trading costs.Private firms are less prone to hostile takeovers.Private firms are exempt from market speculation.More items...
How long can a stock trade under a dollar?
The stock can sell for under $1 a share for 29 consecutive trading days and still be safe from delisting. However, it must sell for $1 or more on day 30. If the stock sells for under $1 a share for 30 consecutive days, it's in violation of the NYSE minimum price regulations.
Will Baba go up?
For its current fiscal year 2022, Alibaba is expected to earn $7.79 a share, down 22% compared to 2021. But growth is expected to ramp up in 2023, up 10% to $8.59.Apr 1, 2022
Why are Chinese stocks falling?
Chinese stocks were tumbling Monday, extending a selloff from last week amid pressures on multiple fronts, including Covid-19 lockdowns in China and regulatory threats on both sides of the Pacific. Shares in some of the country's largest companies saw stark declines.Mar 14, 2022
China wants Didi to delist over security concerns
China is concerned about the security of its citizens’ data. Not only is Didi listed in the U.S., but two of its biggest stockholders, Uber and SoftBank, are non-Chinese companies.
It's unclear what would happen to your Didi stock
Bloomberg first reported that China wants Didi to either list on Hong Kong, which is now fully part of China, or go private. If the company lists in Hong Kong, U.S. Didi investors would get its Hong Kong-listed shares. However, the Hong Kong listing may be at a lower price than its current U.S. price.
SoftBank could lose billions from the Didi fiasco
SoftBank, which is Didi's largest stockholder, would be the biggest loser in a delisting. So would Uber, which got a stake in Didi in exchange for selling its Chinese operations to the company. Uber has been facing tough competition outside the U.S. and has exited several other markets in Asia.
Other Chinese stocks might also fall
Chinese stocks tumbled amid the tech crackdown. Furthermore, just when fears of further Chinese crackdowns were abating, concerns of a slowdown in the world’s second-largest economy grew, exacerbated by Alibaba's tepid outlook during its Q2 2022 earnings release.
Xi Jinping might not care much
For Chinese president Xi Jinping, social stability and national security are a far bigger concern than Didi stockholders losing billions of dollars. The country has taken a hard turn toward the left, erasing the gains it has made over the last two decades. Didi’s delisting would also impact other Chinese companies seeking a U.S. listing.
DIDI Stock in Freefall
Didi lost 22.18% of its value on Dec. 3 after the ride-hailing firm said it would delist from the New York Stock Exchange (NYSE). Bloomberg initially reported on the rumors a week previously.
Limited Trading Strategy
Existing shareholders could keep the stock to the very end, hoping for speculative buying ahead of the listing change. Those who hold the stock after its Hang Seng Stock Exchange listing could benefit.
Chinese Companies Risk Delisting
For months, the U.S. Securities and Exchange Commission (SEC) developed rules for allowing it to delist foreign stocks. After China’s government forced Didi to delist, the SEC may have more government and judicial support.
Opportunities in DIDI Stock
Speculators who bought Luckin Coffee (OTCMKTS: LKNCY) after the company’s accounting fraud scandal could have done well. The stock bottomed at $3.60 and traded as high as $17.79. Didi stock could rebound next year on its Hang Seng listing.
Scenario 1 – Share Buy Back
A share buyback means that the company will buy its shares back from you (and all other investors) at an agreed price.
Scenario 2 – Share Transfer
A share transfer is easy to understand. Company X that’s listed in America, China and Singapore can “transfer” your shares to China or Singapore if Company X were to delist in America.
Scenario 3 – Limbo
In simple terms, you will continue to own the shares in the company but you cannot trade them publicly. This means that if you have 10 shares at $10/share, nothing has changed you will still have that same qty in your brokerage account.
What should shareholders do?
In the case of any delisting, it is unlikely that your investment will completely disappear. There will be warning signs and there will be ample time for you to sell your shares even if you have to do so at a significant loss.
NYSE: DIDI
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China's ride-hailing leader is headed back home
DiDi Global ( DIDI -5.40% ), the largest ride-hailing company in China, plans to delist its shares from the New York Stock Exchange and pursue a new listing in Hong Kong. The announcement, which comes less than six months after DiDi's initial public offering (IPO), shouldn't surprise investors.
1. Going private at a discount to its IPO price
Over the past few years, many Chinese companies that initially went public in the U.S. took themselves private before going public again on Chinese exchanges at much higher valuations. The deals couldn't be blocked because the management controlled most of the votes, and U.S. investors were often forced to sell their shares at steep discounts.
2. Retreating to an OTC exchange
A less painful option would be for DiDi to relist its shares on an over-the-counter ( OTC) exchange. That's what Luckin Coffee ( LKNC.Y 0.00% ) did after it was delisted from the Nasdaq last June. Luckin's stock had dropped below $2 per share at the time after its fabricated sales figures were exposed, but it now trades at about $13.
3. Swapping ADR shares for HK shares
In its press release, DiDi claims its ADR shares "will be convertible into freely tradable shares" in Hong Kong after it relists the stock.
Should investors still hold their shares of DiDi?
DiDi's investors might be reluctant to sell their shares at their current reduced prices, since the stock now trades at less than its estimated revenue this year. However, the stock should remain cheap for a very long time.
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IN THE SPOTLIGHT
What Happens When a Stock Delists? 10 Things to Know About the Didi Delisting.
What Happens When a Stock Delists
Delistings are common and can be voluntary (as is the case with Didi) or involuntary. Most often, a stock delists from an exchange when it ceases operations due to a bankruptcy filing or takeover. Often times, stocks are delisted from an exchange when they no longer meet the listing requirements.
Scenario 1 – Share Buy Back
- A share buyback means that the company will buy its shares back from you (and all other investors) at an agreed price. For most retail investors, we usually do not influence the offer price. We’ll just have to accept it as it is. So you must be wondering, “If I have 10 Didi shares that I bought at $10/share, how much will Didi pay me if they decide to do a share buyback?” In this ca…
Scenario 2 – Share Transfer
- A share transfer is easy to understand. Company X that’s listed in America, China and Singapore can “transfer” your shares to China or Singapore if Company X were to delist in America. There are 2 questions commonly associated with Share Transfers: 1. What if the company doesn’t have a secondary listing? If a company doesn’t have a secondary listing, it cannot consider this as an o…
Scenario 3 – Limbo
- In simple terms, you will continue to own the shares in the company but you cannot trade them publicly. This means that if you have 10 shares at $10/share, nothing has changed you will still have that same qty in your brokerage account. However being unable to trade it publicly means that’s if you try to buy/sell the shares, the trade will most likely be rejected. As such, to trade thes…
Scenario 4 – Cash + Share Transfer
- Think of this scenario as a combination of both scenarios 1 and 2. There’s too much uncertainty to decide if it is better of worst but the mechanics may be as follows, Company A is delisting on US Exchange and could offer shareholders: 1. Cash component and 2. 1 share in exchange for every 3 shares. The closest example I can find to this would be the recent SPH acquisition offer…
What Should Shareholders do?
- In the case of any delisting, it is unlikely that your investment will completely disappear. There will be warning signs and there will be ample time for you to sell your shares even if you have to do so at a significant loss. I hope that no investor would ever have to experience such a scenario as it would most likely result in a losing trade, but it is part and parcel of investing. While I’m not veste…