What happens to holders of stocks which are 'delisted'?

Question

hii

What happens to holders of stocks which are 'delisted'? does it mean they lost their investment. I heard that they can sell through pink sheets..what is it? Is the company from which the shares are bought compnesates in any manner if they are delisted?

thank you

Answer 1

Delisting does not mean 'go under', so the stock is still worth something.  When a stock is delisted, that stock is no longer reported on the NYSE, NASDAQ or AMEX exchanges.  The stock may appear on the 'pink sheets' which is where many low price stocks go, but you would have to confirm that with the company itself.

Delisting can occur due to the company stock price falling below the exchange listing requirements for a certain length of time, or if the market value of the company falls below a certain amount or if the company fails to file financial statements with the SEC.

There is no compensation to shareholders if this occurs, although many shyster lawyers will be happy to help file a class action suit against a company that allow their stock price to fall and delisting to occur.