What happens if Chinese companies are delisted?

What happens if Chinese companies are delisted?

“If a delisting is imminent, the stock price is going to plummet and those who control the company can buy out public investors for a bargain, go private, and relist in Asia at a much higher valuation and make a ton of money—at Americans’ expense,” says Jesse Fried, a professor at Harvard Law School who has been …

Can Chinese stocks be delisted?

The rule approved by the PCAOB, which is overseen by the Securities and Exchange Commission, on Wednesday means that essentially all companies based in China will be subject to delisting.

Will Baba get delisted?

The risk of delisting is often misunderstood. Even if BABA was delisted from the US exchanges, the stock could still trade over the counter or on other exchanges, like Hong Kong. Having said this, it is becoming increasingly likely that BABA will get delisted.

What happens if Baba stock is delisted?

If U.S. regulators ultimately move to delist Alibaba stock, it won’t happen overnight. Investors may be able to simply transfer their shares to a U.S. broker that allows trading in Hong Kong and convert their investment to Hong Kong shares.

What happen if Alibaba delisted?

In the event that the Trump administration forces Alibaba and other companies to delist, U.S. shareholders will still hold their shares. However, the shares would trade in the OTC market. Having already raised the capital, the companies won’t be impacted much unless they have plans to raise more in the near term.

Can I sell a delisted stock?

Although some brokerages restrict such OTC transactions, you generally can sell a delisted stock just as you would a stock that trades on an exchange. A delisted stock can continue to trade over the counter for years, even if the company files for bankruptcy.

Can delisted stock come back?

A delisted stock can theoretically be relisted on a major exchange, but it’s rare. The delisted company would have to avoid bankruptcy, solve the issue that forced the delisting, and again become compliant with the exchange’s standards.

What happens if my shares are delisted?

When a company delists, investors still own their shares. However, they’ll no longer be able to sell them on the exchange. When a company delists voluntarily to trade privately, they sometimes offer shareholders additional benefits such as warrants, bonds, and preferred shares.