Alibaba on NYSE Delisting List: What Happens to Shares When a Stock is Delisted?$Alibaba(BABA)$ $Alibaba(09988)$ 

The US SEC on 29/7/22 (Friday) added Alibaba (BABA) to a list of Chinese companies at risk of being delisted from the US exchanges if their auditors can’t be inspected before spring 2024.

The move comes days after Alibaba said it would apply for a primary listing in Hong Kong, where it obtained a secondary listing in 2019. Securing a primary listing in the Asian financial hub would allow BABA’s shares to continue to be traded even if it is booted from the American bourse.

BABA is among more than 270 Chinese companies listed in New York identified as being at risk of delisting under the Holding Foreign Companies Accountable Act (HFCAA), intended to address a long-running dispute over the auditing compliance of US-listed Chinese firms. US regulators have been demanding complete access to audit working papers of New York-listed Chinese companies, which are stored in China.

US listed shares of BABA fell 11.12% on 29/7, & have lost 55% of their value over the past 12 months. HK listed shares of BABA fell6.1% on 29/7.

🤔💭 What Does It Mean When a Stock is Delisted?

📝 To be delisted means the stock is no longer traded on that specific stock exchange. A company can elect to delist its stock (voluntary delisting), pursuing a strategic goal, or it can be forced off the exchange because it no longer satisfies its minimum requirements (involuntary delisting). These requirements may have to do with maintaining minimal stock prices, minimal market capitalization requirements, or required document filings.

➡️ Under the HFCAA of 2020—which took effect in 2021—the US can ban the trading of securities can of companies whose auditors can’t be inspected by the American audit watchdog for 3 consecutive years.

🤔💭 What Happens to Shares When a Stock is Delisted?

📝 (1) If a stock is delisted, shares may continue to trade over-the-counter (OTC) on the OTC bulletin board. Shareholders can still trade the stock, though it is likely that the market will be less liquid.

(2) If the stock ceases to be publicly traded, shareholders may be either bought out or have their shares restructured to participate in the private equity holding of the company.

(3) Sometimes, shareholders are offered warrants, bonds, & preferred shares when a company moves from the public to private status.

➡️ The Bottom Line: A delisting does not directly affect shareholders' rights or claims on the delisted company. It will, however, often depress the share price & make holdings harder to sell, even as thousands of securities trade OTC.

🤔💭 What Should I Do When a Stock I Own Faces Delisting Risks?

⚠️ Delistings can represent either positive or negative developments for stocks. Investors should be aware of the company's financial situation in order to determine what course of action to take following a delisting.

⚠️ Shareholders should carefully evaluate delisted stocks, as moving off an exchange may mean that the company is in financial trouble & may be facing bankruptcy soon.

Source websites: Wall street journal, seekingalpha, reuters & investopedia.

@TigerStars @CaptainTiger @MillionaireTiger 

# Thoughts on Alibaba's dual primary listing?

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Report

Comment738

  • Top
  • Latest
  • jia you bah
    Reply
    Report
  • Johnnych
    ·08-03
    阿里巴巴在美国股票是不是只有一种股票?
    Reply
    Report
    Fold Replies
    • LMSunshine
      美国的 stock code 是 $Alibaba(BABA)$ 香港的 stock code 是 $Alibaba(09988)$
      08-04
      Reply
      Report
    • LMSunshine
      Alibaba may fall further,read my posts today on Pelosi’s visit.You can follow me so you’ll be updated on my new posts or you can click on the snoopy icon to go to my homepage to read my other posts
      08-04
      Reply
      Report
  • kermitgogh
    ·08-03
    Still heavy loss... 😭 Unable to sell
    Reply
    Report
    Fold Replies
    • LMSunshine
      Hope it gets better soon! But do monitor the news to see if you need to stop loss by selling.
      08-04
      Reply
      Report
  • miker9110
    ·08-02
    Good Share
    Reply
    Report
  • phagefish
    ·08-02
    I think the more worrying thing is the falling price that occurs before delisting. it may drop so low that you wished it is delisted. both 9988 and BABA price are falling like Siamese twins.
    Reply
    Report
    Fold Replies
    • LMSunshine
      Investors panick so they’re selling.
      08-02
      Reply
      Report
  • phagefish
    ·08-02
    as an investor, I only care about the price. over time, it goes up. Alibaba is a good business but BABA is a bad stock unfortunately. price keeps going down for non business reasons.
    Reply
    Report
    Fold Replies
    • LMSunshine
      Will it definitely go up?Analysts have been raving about PLTR,but each bottom is worst after that 1 time high.Seems like investors have lost interest in the stock-Hard to see it picking up?
      08-02
      Reply
      Report
  • TigerEye
    ·08-02
    thanks for sharing 😊
    Reply
    Report
  • Awesome article 👍, I'm always interested in Alibaba stock (sounds weird but haha) but since Trump steps up the US's game against China, I adopt a wait and see approach. Prudence helps I guess.
    Reply
    Report
    Fold Replies
    • LMSunshine
      Thanks for sharing your thoughts & continual support & kind words 🤗Hope to hear more from you!Yep prudence is 👍
      08-02
      Reply
      Report
  • phagefish
    ·08-02
    even if HK is a good haven if BABA is delisted from US, the price falls are still in synchrony. investors only care about the price. So whether the shares are in HK or USA, it is the same.
    Reply
    Report
    Fold Replies
    • LMSunshine
      Agree HK stock price will be affected if it’s delisted from US. Appreciate you sharing your thoughts,love the convo🤗
      08-02
      Reply
      Report
    • LMSunshine
      Hope to hear more from you!Do check out other posts on my homepage & please help to like,many thanks🤓Let me know if you want me to like yours too!
      08-02
      Reply
      Report
  • Peter H
    ·08-02
    好👌🏻
    Reply
    Report
  • greedycat
    ·08-02
    like一个呗
    Reply
    Report
  • faizalr
    ·08-02
    hi! newbie here. what's the current best stock to trade? appreciate it
    Reply
    Report
    Fold Replies
    • LMSunshine
      Hello Faizalr!I’ve wrote quite a number of posts on various stocks comparisons. Click on the Snoopy icon & you’ll go to my homepage where you can read on the stocks you’re interested in.
      08-02
      Reply
      Report
    • LMSunshine
      As you’re new to investing,you may want to consider safer stocks like PFE & BNTX & APPL, GOOGL, QCOM. Have a read on my posts & please do your own research 🤓 Pls help to like my posts, many thanks!
      08-02
      Reply
      Report
  • jimstocker
    ·08-02
    Nice to know about it. thanks
    Reply
    Report
  • Punk_dy
    ·08-02
    Thanks for sharing 🙏🏼
    Reply
    Report
  • Pepprick
    ·08-02
    If the stock is delisted, then the opportunity cost or access to caah in tbe world biggest stock exchange will be lost. the loss of liquidity will be real
    Reply
    Report
    Fold Replies
    • LMSunshine
      Yes…but worst impact on investors as BABA did not announce if delisting occurs, when they be given HK shares instead, so investors are left hanging.
      08-02
      Reply
      Report
    • LMSunshine
      Appreciate you sharing your thoughts,love the convo🤗Hope to hear more from you!Do check out other posts on my homepage & please help to like,many thanks🤓Let me know if you want me to like yours too!
      08-02
      Reply
      Report
  • jat
    ·08-02
    thank you for compiling this... certainly helps share holders like me
    Reply
    Report
    Fold Replies
    • LMSunshine
      Welcome, happy to share 🤗
      08-02
      Reply
      Report
  • Yolly08
    ·08-02
    Nice sharing👍🏻
    Reply
    Report
  • Bobster
    ·08-02
    might as well. start the move of the world's capital central out of the sinking ship called USA
    Reply
    Report
    Fold Replies
    • RedpillBluep
      As long as the world currency is still US dollar, it will never be a sinking ship, not even close by a far stretch.
      08-02
      Reply
      Report
    • LMSunshine
      Care to share reasons on why you feel US is a sinking ship? Where’s better? Would love to learn from you 🤓
      08-02
      Reply
      Report
    • LMSunshine
      Appreciate you sharing your thoughts,love the convo🤗Hope to hear more from you!Do check out other posts on my homepage & please help to like,many thanks🤓Let me know if you want me to like yours too!
      08-02
      Reply
      Report
    View more 1 comments
  • seems like the clampdown is still ongoing?
    Reply
    Report
    Fold Replies
    • ARIESan
      Isit
      08-02
      Reply
      Report
    • LMSunshine
      Yes looks like…Thanks for sharing your thoughts & continual support, appreciate it loads🤗 Hope to hear more from you 🤓
      08-02
      Reply
      Report
  • Elky
    ·08-02
    Guess more trading for the hk listed ticker...
    Reply
    Report
    Fold Replies
    • LMSunshine
      Yes looks like! Thanks for sharing your thoughts, appreciate it loads🤗 Hope to hear more from you 🤓
      08-02
      Reply
      Report