Five U.S.-Listed Chinese Companies to Delist from NYSE (2024)

FAQs

Five U.S.-Listed Chinese Companies to Delist from NYSE? ›

Five Chinese companies listed on the New York Stock Exchange said they intend to delist their American depositary shares. The firms include China Life Insurance, PetroChina, China Petroleum & Chemical, Aluminum Corp. of China and Sinopec Shanghai Petrochemical.

Five major Chinese companies, including China Life Insurance Company, PetroChina Company Limited, China Petroleum & Chemical Corporation, Aluminum Corporation of China Limited, and Sinopec Shanghai Petrochemical Company Limited, recently indicated they will voluntarily delist from the New York Stock Exchange (NYSE).

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The last two remaining—China Eastern Airlines and China Southern Airlines— said they would apply to delist their American depositary shares from the New York Stock Exchange, following other Chinese state-owned firms that delisted last year.

Five Chinese SOEs announced they would voluntarily delist from the NYSE on August 12, 2022. These SOEs are Aluminum Corporation of China Limited, China Life Insurance Company, China Petroleum and Chemical Corporation (SINOPEC), PetroChina International Limited, and SINOPEC Shanghai Petrochemical Company, Ltd.

In separate statements issued Friday, China Life Insurance, PetroChina, Sinopec, Aluminum Corporation of China and Sinopec Shanghai Petrochemical said they had notified the NYSE and applied for “voluntary delisting.”

More than 100 Chinese tech companies such as Alibaba , Baidu and JD.com had faced the risk of delisting in the U.S. in 2024 if their audit information was not made available to PCAOB inspectors. Investors often grapple with a lack of transparency into Chinese stocks. “It will allow institutional investors to come back.

Under a 2020 law called the Holding Foreign Companies Accountable Act (HFCAA), Chinese companies can be delisted if their auditors fail to comply with U.S. accounting standards. Those requirements include allowing inspections of auditors by the Public Company Accounting Oversight Board (PCAOB).

If a company is delisted, you are still a shareholder, to the extent of a number of shares held. And yet, you cannot sell those shares on any exchange. However, you can sell it on the over-the-counter market.

Aluminum Corp. of China, China Life Insurance, PetroChina and Sinopec all announced they plan to delist from U.S. stock exchanges within the next month.

Delisting won't impact Alibaba's business; the company will still operate the same regardless of where its shares trade. The added volatility of trading on the OTC markets isn't for everyone, but if it comes to that point, Alibaba can still be a good investment for investors willing to take on the risk.

What happens to my money if a Chinese stock is delisted? ›

Once a stock is delisted, the company's shares can keep trading through a process known as “over-the-counter.” But that means the stock is outside the system — of major financial institutions, deep liquidity and the ability for sellers to find a buyer quickly without losing money.

For now, we continue to caution heightened delisting risks for NIO given its organizational structure's link to state-backed entities, in addition to broad-based market concerns on the near-term domestic economic slowdown in China, which could introduce further volatility to the NIO stock.

This means that the company is unable to issue new shares to the market to establish new financial initiatives. In the United States, delisted securities may be traded OTC except when they are delisted to become a private company or because of liquidation.

“…a total of 179 companies have been delisted from the major United States exchanges between 2020 and 2021. “In 2021, the number of companies on Nasdaq and the New York Stock Exchange (NYSE) stands at 6,000, dropping 2.89% from last year's figure of 6,179.

Investors trimmed their exposure to China amid economic uncertainty in the country, rising geopolitical tensions and Beijing's crackdown on international consulting firms. The Nasdaq Golden Dragon China Index has lost more than 5% since April 18. Hong Kong's Hang Seng (HSI) Index has also shed 5%.

The accounting problems and financial frauds tarnished the reputation of Chinese ADRs, and drove their share prices lower, even though many of them are high-quality companies. There are two main types of delisting from the NYSE and NASDAQ: involuntary delisting and voluntary going-private.

This table includes Chinese companies listed on the New York Stock Exchange (NYSE), Nasdaq, and NYSE American, the three largest U.S. exchanges. * As of January 9, 2023, there were 252 Chinese companies listed on these U.S. exchanges with a total market capitalization of $1.03 trillion.

A stock can be removed from the exchange and delisted either voluntarily or involuntarily. When this happens, the stock either moves to private status and is restructured or it trades over-the-counter.

Delisted shares cannot be traded on the stock exchange, to sell these shares one needs to trade them in the over-the-counter market.

Which companies are recently delisted? ›

Once a stock is delisted, stockholders still own the stock. However, a delisted stock often experiences significant or total devaluation. Therefore, even though a stockholder may still technically own the stock, they will likely experience a significant reduction in ownership.

A delisting does not directly affect shareholders' rights or claims on the delisted company. It will, however, often depress the share price and make holdings harder to sell, even as thousands of securities trade over-the-counter.

To deduct your stock market losses, you have to fill out Form 8949 and Schedule D for your tax return. If you own stock that has become worthless because the company went bankrupt and was liquidated, then you can take a total capital loss on the stock.

March 24 (Reuters) - Weibo Corp said on Thursday it will consider evaluating options after the Chinese social media platform was added to U.S. securities regulator's list of companies facing the risk of being delisted.

Conclusion. Overall, the recent news is a great positive for Chinese companies. BABA, JD, and BIDU should all benefit from the fact they likely won't be delisted from the US exchanges.

The Chinese government is buying shares in Alibaba, Tencent and other tech companies, according to the Financial Times. The stakes usually involve a 1% holding and are known as "special management shares." This gives China's Communist Party special rights over certain business decisions, the report said.

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.

China Telecom (0728.HK), China Mobile (0941.HK) and China Unicom (0762.HK) were delisted from the United States in 2021 after a Trump-era decision to restrict investment in Chinese technology firms.

How long does it take to get delisted from NYSE? ›

The NYSE, shown here, may compel a stock to delist if its share price falls below $1.00 and it is unable to regain compliance within 6 months.

If you short a stock and it then rises in price to the point where the losses exceed the liquidation value of your trading account, you will receive a margin call. At this point, you must deposit more collateral to cover the position. If you don't, the position will be closed and your balance wiped out.

You may be wary about betting as much, but there's no reason to sell Nio stock now if you own it. And if you don't own the EV stock yet, you may even want to buy some shares on the dip given Nio's growth plans for 2023 and beyond.

Companies have 10 days on the New York Stock Exchange (NYSE) to respond to a notification letter from the exchange. Failure to respond can result in delisting procedures which is on a case by case basis but can range from one to seven months.

NIO has received a consensus rating of Buy. The company's average rating score is 2.55, and is based on 6 buy ratings, 5 hold ratings, and no sell ratings.

Stocks are able to lose all their value in the market, and have done so before, especially in the case of a bankruptcy. Even if a company does go bankrupt, in reality shareholders often do receive some residual payment back, but this is usually just pennies on the dollar.

But what if I refuse to sell my shares when a company is privatized? In most exchanges, the investor that held on to the shares post-delisting would continue to enjoy legal and beneficial ownership and rights. Provided the shares are not kept in a custodian account & no “force sale” clause in the shareholder agreement.

With businesses jostling to join the trading platforms, the exchanges have also delisted a significant number of companies. According to data acquired by Finbold, a total of 179 companies have been delisted from the major United States exchanges between 2020 and 2021.

NYSE Listing Requirements

Its share price must be a minimum of $4.00, and the market value of its publicly held shares must be at least $40 million—or $100 million for transfers and certain other listings. In addition, the company must be profitable, earning at least $10 million over the past three years.

A web resource for historic stock prices is Yahoo Finance (Stock Prices) - http://finance.yahoo.com/ . Stock prices go back to the 1070s. Begin by doing a search using the ticker symbol, then choose "Historical Prices" from the blue bar on the left; choose daily, weekly, or monthly data.

How many companies get delisted from Nasdaq? ›

"Companies aren't getting capital." This year, the New York Stock Exchange and Nasdaq Stock Market have delisted 129 companies for violating listing standards, the highest number since 226 in 2003.

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China is still one of the largest economies worldwide and is home to the world's largest consumer market. Taking into account the size of the population ad the spending power, its existing regulations and policies on foreign investments are still more attractive compared to alternative emerging markets.

Asian markets finished mixed as of the most recent closing prices. The Shanghai Composite gained 0.49% and the Hang Seng rose 0.25%. The Nikkei 225 lost 0.85%.

The five companies that announced their delisting on Aug. 12 are PetroChina, China Life Insurance, Aluminum Corporation of China (Chalco), Sinopec, and subsidiary Sinopec Shanghai Petrochemical Co. They plan to apply for delistings of their American Depository Shares (ADRs) this month.

This does not mean that a delisting is imminent, however. It merely means that the SEC has identified Alibaba as one of many companies that could potentially be delisted if certain disclosure and transparency requirements are not met in the future.

If Chinese ADRs are undervalued due to a lack of liquidity or analyst coverage, they may find the costs incurred to maintain their listing status and the costs of compliance with regulatory requirements unjustified, which may motivate them to delist and go private.

Investors holding shares after a delisting will only be able to sell them OTC. That generally means less liquidity, finding it harder to locate buyers at the price you want, and potentially being left in the dark about what the company is up to.

Once a stock is delisted, stockholders still own the stock. However, a delisted stock often experiences significant or total devaluation. Therefore, even though a stockholder may still technically own the stock, they will likely experience a significant reduction in ownership.

What Happens If a Stock Is Delisted? When delisted, the stock becomes no longer publicly listed on the stock market. In Alibaba's case, it wouldn't be traded on the New York Stock Exchange (NYSE). The delisted stock could still be traded over-the-counter (OTC), which means that it trades in a decentralized market.

Should I buy Alibaba shares now? ›

Alibaba currently has an average brokerage recommendation (ABR) of 1.04, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 14 brokerage firms. An ABR of 1.04 approximates between Strong Buy and Buy.

Alibaba's analyst rating consensus is a Strong Buy.

Goldman Sachs Group Inc. said markets are still pricing in a 50% chance of Chinese companies being delisted from US exchanges, even as the two nations reached a preliminary deal to resolve a decades-long standoff over audits.