The New York Stock Exchange (NYSE) has initiated the process to delist Express Inc., an apparel retailer, from its platform. This decision was made by Section 802.01B of the NYSE's Listed Company Manual, which mandates that companies maintain a certain average global market capitalization over a consecutive 30-day trading period. In April, the NYSE warned Express about the potential for delisting due to its share price falling below the $1.00 threshold.
Delisting can occur voluntarily or involuntarily and often results from a company not meeting the exchange's listing requirements, such as maintaining minimum revenue standards, market capitalization thresholds, and shareholder percentage requirements. For Express, the delisting does not affect its business operations or reporting obligations to the U.S. Securities and Exchange Commission or trigger a default under any of the company's material debt or other agreements.
However, delisting typically reduces shareholders' liquidity, making it more challenging to sell shares quickly and easily. When a stock is delisted, shareholders retain ownership. Still, the shares may lose value and become more challenging to trade, often moving to over-the-counter (OTC) markets where they can be sold, albeit with less regulation and transparency.
Companies have a 10-day window to respond to a delisting notification from the NYSE, and failure to do so can lead to delisting procedures that vary in duration but can range from one to seven months. In the case of Express, trading on the NYSE was suspended after the market closed on March 6, 2024.
For those holding shares in a delisted company, options include selling the shares before delisting, trading them OTC, or negotiating a private sale with the company's promoters if the delisting has been in effect for over a year. A delisted company can also re-list if it meets the exchange's requirements once again.
