How finance folk use it
Companies with stocks or shares traded in a stock exchange are said to be "publicly listed" when they’re included in a list of corporations that meet standards that allow their shares to be available for the public to invest in.
Delisting is what happens when the company leaves that list.
For example, if company ABC stocks are available on the PSE (Philippine Stock Exchange), that means ABC is listed on the PSE. ABC has to regularly meet regulatory standards and disclose business information to the investing public. If ABC decides to become a private company again, it can then delist from the PSE.
Is it good or bad?
There are generally 2 kinds of delisting: voluntary and involuntary.
When a company delists voluntarily, it’s normally because its top-level management decides that there are more benefits to becoming a private company than staying publicly listed in the stock exchange.
Some reasons for voluntary delisting include streamlining their decision-making process, not wanting to disclose information to the investing public (to be more secretive about strategies), and to not have to comply with the stock exchange’s standards.
When a company involuntarily delists, it could be because it is being penalized for not meeting certain regulatory standards or for committing a violation. In the Philippine Stock Exchange, companies that involuntarily delist can’t apply for listing for 5 years.
What it means for you
When a company delists, whether voluntarily or involuntarily, it leaves the list of companies that are allowed to trade their shares on the stock exchange.
If this happens to a company whose stocks you own, those you can either choose to sell these stocks or hold on to them.
