Delisting: Strategic Considerations and Regulatory Compliance in Financial Markets

Author : Javier González Nuñez

Abstract :The act of delisting, the withdrawal of a company’s stock from being publicly traded, presents multifaceted strategic and regulatory considerations. This study delves into the motivations behind companies' decisions to delist, examining both forced and voluntary scenarios across different global markets. We start with a foundational understanding of Initial Public Offerings (IPOs), crucial for appreciating the reverse process of delisting. The exploration reveals the nuanced benefits and drawbacks of delisting, such as cost reduction, regained privacy, and loss of capital access. The research methodologically analyzes regulatory frameworks in the United States and Europe, emphasizing compliance challenges and the impact of legal requirements on delisting decisions. Case studies of companies like Omega Pharma and Dell provide practical insights into the corporate strategies behind their delisting choices. The findings suggest that while delisting can be a shield against market volatility and a step towards strategic reorientation, it also carries risks of reduced market presence and funding opportunities. The article concludes by proposing balanced regulatory reforms to aid companies contemplating delisting, ensuring they meet both business goals and governance standards.

Keywords :Financial Markets, Strategy, Delisting, IPO

Conference Name :International Conference on Banking, Accounting and Finance (ICBAF-2024)

Conference Place Rosario, Argentina

Conference Date 2nd Jan 2025