10-K Wrap

finance a la shmoop what does it mean to delist? well when you list your company

you are listing it on the big board this thing or at least having it show up in [Companys shown as a list on a screen]

the list of publicly traded stocks on some exchange somewhere you know like

this list think listing good...de- listing probably very bad delisting

happens in one of two ways either an already existing public company gets

bought by an even larger company and it no longer trades is a separate

standalone security so its ticker symbol has taken off the exchange and la-dee-da [Company name removed from stock board]

it's done that's good but delisting also happens when a company's stock price is

so low that it can't trade as a standalone company anymore meaning that

it comes to trade at a minimum threshold of an exchange like below $1 a share

yeah breaking the buck there is a little different with equities but it's a bad

thing why is this a problem well if buyers

want to buy a stock there's a given amount of administration and overhead

and legal things that have to be done that cost money so if that minimum fixed

cost is something like four or five cents a share

then at $1 it costs four or five percent of the investment each time those shares

are traded right like that's at a buck a share each and it gets worse as the [Arrow points to share price]

stock falls further below a dollar so to fight delisting companies often do

reverse splits that is if they had two hundred million shares outstanding and

we're gonna get delisted trading at $1 a share while they might do a one for ten

reverse split such that after this reverse split the company has only 20

million shares outstanding but they're trading now at about ten bucks a share

it's not a great way to go investors usually hate things like that [People arguing over shares]

and would likely sell down the stock on the announcement but keeping the stock

well above a buck a share keeps the delisting demons at bay [Man stood in the street and demons float around him]

at least for a while