What Happens to Stock After Delisting?

Getting Listed

The requirements for getting listed on an exchange differ from the requirements for maintaining listing once a stock is already listed. In order to be listed on the NYSE, a company must have at least one million shares of stock outstanding, worth a combined market value of at least $100 million. The NASDAQ requires 1.25 million outstanding shares, worth a combined total of $70 million.

In order to maintain listing on both exchanges, a company's stock must remain above $1 per share. Additionally, the total combined value of all outstanding stock must remain above $75 million on the NYSE and $50 million on the NASDAQ. Moreover, companies are required to regularly report earnings on a timely basis and have their books regularly examined by independent auditors.

If a company fails to meet continued listing requirements for the exchange it trades on, it can be delisted. When this happens, the company's stock will begin trading on the OTC market. The OTC market is a private network of computers that provide stock quotes and allow buyers and sellers to exchange stock with one another electronically, similar to NASDAQ.

Being delisted from an exchange often indicates that a company is experiencing financial trouble. As a result, its stock price can experience selling pressure as investors lose confidence in the company and sell their stock. Delisting can also lead to a downgrading of a company's credit score, making it more expensive for the company to borrow and raise money in order to stay in business. A company can survive a delisting, but being delisted is rarely a positive development.