If I have shares with them, what can be done? Since I won’t be able to sell
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Have you ever been to the market, let's say the busy Oshodi Market in Lagos, where you notice some shops are closing up and some traders are packing their goods to leave? It's a sign that the market day is ending, right? Well, when a company is about to be delisted on the Nigerian Exchange Group (NGRead more
Have you ever been to the market, let’s say the busy Oshodi Market in Lagos, where you notice some shops are closing up and some traders are packing their goods to leave? It’s a sign that the market day is ending, right? Well, when a company is about to be delisted on the Nigerian Exchange Group (NGX), it’s kind of like that.
Delisting happens when a company is no longer meeting the requirements set by the NGX. It could be because the company is struggling financially, not submitting necessary reports, or even deciding to go private. Just like the traders leaving the market, the company may be leaving the stock exchange.
Now, if you have shares in a company that’s about to be delisted, don’t panic. You still have options. You can choose to hold onto your shares even after delisting, hoping the company turns things around. Alternatively, you might be able to sell your shares on the over-the-counter market. This is a way to trade shares privately after they are no longer on the official exchange.
Remember, investing in the stock market comes with risks, including the possibility of a company being delisted. It’s essential to stay informed about your investments and seek advice from a qualified financial advisor when needed. Don’t forget, just like in the market, change is constant, and being prepared for it is key.
See lessWhen you buy share with any company, you need to keep an eye on there progress which include tracking there financial documents with regularly checking there responses to NGX rules and regulations. So, if NGX will delist them, the company would have repeatedly fails to submit its financial statementRead more
When you buy share with any company, you need to keep an eye on there progress which include tracking there financial documents with regularly checking there responses to NGX rules and regulations. So, if NGX will delist them, the company would have repeatedly fails to submit its financial statements, violates NGX listing rules and that will attract sanctions from NGX or a compliance notices against the company. Also, if the company fails to meet the minimum requirements for continued listing. All these and many are indicators of possible delisting signs or signals you will begin to take note of.
See lessYou can know when an NGX-listed company is at risk of being delisted by paying attention to official NGX announcements and the company's regulatory filings. Some warning signs include prolonged suspension of trading, failure to meet NGX listing requirements, inability to file financial statements onRead more
You can know when an NGX-listed company is at risk of being delisted by paying attention to official NGX announcements and the company’s regulatory filings.
Some warning signs include prolonged suspension of trading, failure to meet NGX listing requirements, inability to file financial statements on time, insolvency or financial distress, and announcements about voluntary or compulsory delisting.
For example, if you own 10,000 shares of Company A and NGX announces that the company will be delisted, you should not wait until the final day. First, check the reason for the delisting and the terms of the process.
If it is a voluntary delisting, there may be an exit offer or other arrangement through which existing shareholders can sell their shares, depending on the terms approved by the regulators.
If it is a compulsory delisting, the situation can be more complicated. You may no longer be able to sell the shares normally through the NGX trading platform after the delisting takes effect. However, the shares don’t necessarily just disappear. Your rights as a shareholder depend on the reason for the delisting and the company’s restructuring or liquidation process.
For example, if someone bought 10,000 shares at ₦20, that is ₦200,000 invested. If the company is later delisted because of serious financial problems, the shareholder could potentially suffer a significant loss. In a liquidation, shareholders are generally among the last parties to receive anything after creditors and other obligations have been settled.
So, before buying a stock, I think it is important to monitor not only the share price but also the company’s financial statements, regulatory announcements and NGX notices.
And if a delisting announcement has already been made, the best thing is to contact the stockbroker holding the shares and ask specifically what options are available before the effective delisting date.
In simple terms:
Don’t wait until you want to sell before checking the company’s status. Monitor the company and NGX announcements regularly.
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