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Simple English definitions for legal terms
delisting
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A quick definition of delisting:
Delisting is when a company's stock is no longer allowed to be traded on a stock exchange. This happens when the company doesn't meet the requirements set by the exchange, like having enough money or following the rules. It's like getting kicked out of a club for not following the rules.
A more thorough explanation:
Definition: Delisting is the removal of a security from an exchange because it fails to meet the exchange's listing requirements. This can happen if the security does not comply with the minimum net-asset requirement.
Example: If a company's stock is delisted from the New York Stock Exchange (NYSE) because it no longer meets the exchange's listing requirements, investors will no longer be able to buy or sell the stock on the NYSE.
This example illustrates how delisting can impact investors who hold a particular security. When a security is delisted, it can become more difficult to trade, which can lead to a decrease in liquidity and potentially lower prices.