City Research Online

Why Do Companies Delist Voluntarily from the Stock Market?

Kashefi-Pour, E. & Lasfer, M. (2013). Why Do Companies Delist Voluntarily from the Stock Market?. Journal of Banking and Finance, 37(12), pp. 4850-4860. doi: 10.1016/j.jbankfin.2013.08.022


We analyse the motives and market valuation of voluntarily delisting from the London Stock Exchange. We show that firms that delist voluntarily are likely to have come to the market to rebalance their leverage rather than to finance their growth opportunities. During their quotation life, their leverage and insider ownership remained very high, they didn’t raise equity capital, and their profitability, growth opportunities, and trading volume declined substantially. They also generate negative pre-event and announcement date excess returns. These results hold even after controlling for agency, asymmetric information, and liquidity effects, and suggest that firms delist voluntarily when they fail to benefit from listing. Overall, these firms destroyed shareholder value and they shouldn’t have come to the market.

Publication Type: Article
Additional Information: © 2015, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International
Publisher Keywords: Small firms; AIM; London Stock Exchange; Leverage; Delisting; IPO
Subjects: H Social Sciences > HG Finance
Departments: Bayes Business School > Finance
SWORD Depositor:
[thumbnail of Kashefi-Pour and Lasfer 2014 Why Do Companies Delist Voluntarily from the Stock Market.pdf]
Text - Accepted Version
Available under License : See the attached licence file.

Download (336kB) | Preview
[thumbnail of Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International]
Text (Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International) - Other
Download (201kB) | Preview


Add to AnyAdd to TwitterAdd to FacebookAdd to LinkedinAdd to PinterestAdd to Email


Downloads per month over past year

View more statistics

Actions (login required)

Admin Login Admin Login