Personal Development, Finance, and Investing For Filipinos
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My stocks got delisted, what should I do?
When a stock gets delisted, it means that it will no longer be publicly traded in the major stock exchanges, like here in the Philippines, we have The Philippines Stock Exchange, Inc. (PSE).
Before understanding what retail investors can do after a stock gets delisted, first an investor, you must know the main types of delisting:
It is when a company decides to remove its stock in the stock exchange, either as a strategic move or if it can no longer comply with the listing and disclosure rules of the Exchange.
It is when the Exchange removes a stock, often due to multiple violations committed by the listed company or revocation of the registration of securities and permit to sell. In the Philippines, companies involuntarily delisted are not allowed to re-list in the PSE for the next 5 years, and directors and officers will be disqualified from becoming directors or officers of any company applying for listing with the Exchange.
Note: A stock may also be delisted when a company merges with another listed company.
What happens to your stocks prior to voluntary delisting?
Retail investors have 3 options:
Accept the company's tender offer
The Tender Offer is an opportunity to buy back the stocks at a fixed price. This is the most convenient option, especially if investors can still make a profit from their investments.
Sell your shares in the open market
Investors can sell their shares in the open market instead of to the company, especially if there is more profit to be made.
Keep the stock
Investors can still be shareholders of the company, but the stock can no longer be traded in the Exchange.
For companies that will undergo involuntary delisting, the policy on unloading stocks varies on a case-to-case basis. Always remember to closely monitor the companies you invest in. When the company is already delisted, the options will be either to keep the stock or sell it off exchange or over-the-counter.
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ABOUT THE BLOGGER
Hi, I'm Ralph Gregore Masalihit!
An RFP Graduate (Registered Financial Planner Institute - Philippines).
A Personal Finance Advocate. An I.T. by Profession. An Investor. Business Minded. An Introvert. A Photography Enthusiast. A Travel and Personal Finance Blogger (Lakbay Diwa and Kuripot Pinoy).
Currently, I'm working my way toward time and financial freedom.