Potential delisting of Faraday Future Intelligent Electric Inc??
$Faraday Future Intelligent Electric Inc.(FFIE)$
If the Company fails to appeal the Delisting Determination by May 1, 2024, trading of the Company’s common stock will be suspended at the opening of business on May 3, 2024, and a Form 25-NSE will be filed with the Securities and Exchange Commission, which will remove the Company's securities from listing and registration on The Nasdaq Stock Market.
What Is Delisting?
Delisting is the removal of a listed security from a stock exchange. The delisting of a security can be voluntary or involuntary and usually results when a company ceases operations, declares bankruptcy, merges, does not meet listing requirements, or seeks to become private.
What Happens to My Shares After Delisting?
When a company delists voluntarily, shareholders will usually receive cash to buy them out or shares in the new, acquiring company.
When it is forced to go, the outcome is usually different. No special offer comes. You either find a buyer on the exchange or are left holding a stake in a company that's no longer listed.
Holding delisted stocks generally isn't very desirable. The shares don't disappear but do become much more difficult to trade. Once off the exchange, they can trade OTC. These markets don't offer the same accessibility and liquidity as the major exchanges. You'll be faced with higher transaction costs and wider bid-ask spreads.
Another factor to consider is that there's less regulation outside of the major exchanges. Requirements are more relaxed, including those relating to communications, leaving investors more in the dark and unaware of what is going on within the company in which they're invested.
What Should I Do After Delisting?
If you still hold shares after they've been delisted, your next step depends a lot on what you're invested in, how convinced you are about its prospects, and whether you have the stomach to deal with the murkier, less transparent alternative exchanges.
You can still sell the shares, but the conditions to do so will now be generally less favorable. Volume thins out when you leave a major exchange. With OTC transactions, there are fewer buyers and sellers, meaning wider bid-ask spreads and getting less than the going rate. In some cases, you may only be able to trade the shares by appointment.
There are other highly volatile counters as well such as $AMC Entertainment(AMC)$
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