What it is
A company's stock can be delisted voluntarily or involuntarily. Voluntary delisting often occurs when a company goes private, is acquired, or files for bankruptcy. Involuntary delisting happens when a company fails to meet exchange requirements, such as minimum share price, market capitalization, financial reporting standards, or liquidity. Once delisted, the stock may trade on over-the-counter (OTC) markets, like the pink sheets, but with significantly reduced liquidity and transparency.
Delisting news often signals severe financial distress or a major corporate event, causing significant price volatility for the affected stock. For example, a company facing delisting due to low share price might experience a further sell-off. Retail investors holding a delisted stock face challenges selling their shares and may suffer substantial losses due to illiquidity and a lack of public information. It's a critical event for shareholders to monitor.
Why it matters
Delisting can severely impact a stock's liquidity and value, making it difficult to sell and potentially leading to substantial losses for investors.
Reviewed under editorial standardsUpdated September 26, 2026Not investment advice