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Invaluable Stock Holding Rights (Part 2)

22 January 2008 - Features - Editor

Invaluable Stock Holding Rights (Part 1)

It is never easy to glean the individual and true opinions of regulators, but we can gain some glimpses by studying their scholarly presentations at selected events. The best in the business are concerned about the negative effects of delisting, and these worries are hardly limited to getting fair compensation in the exit stock price! A review of committees that have deliberated on the delisting phenomenon will show that they are simply get-togethers of big business and government bureaucrats. Even the most innocuous measures to protect stock investors with minority holdings are met with dissenting expressions by representatives of industries.

Some of the most important classes of stakeholders may own no stocks! Discrimination and abuse of every variety is possible after delisting. It is another matter if stocks were never offered to the public, but to take them back under thinly veiled guiles of coercion is just not acceptable. You will know if you have been a victim of delisting that the prospect of not being able to trade the stock for cash is held over your head as a decapitating sword of fear! Must we become sacrificial goats?

Conscientious Objections to Delisting Stocks

It is both a blessing and a drawback that each unit of stock carries an equal vote. It means that you cannot enforce a dissenting view if you are in the minority, but that should not discourage you from registering your protest. Therefore, you should use your proxy powers as a stock investor, even if it is not worth your while to attend a meeting in person, and vote against any move to transfer ownership exclusively to private equity or to a foreign entity. Further, you can always exercise your prerogative not to part with your stocks, even in the event of a majority resolution regarding delisting. Hold at least a few units of stocks, even if you have to surrender most of them because a loss of liquidity threatens you. Do not take suggestions about being denied fair dividends lying down, and ask regulators for relevant protection instead. Never lose sight of the fact that paths to fair-play and the truth may have tortuous rather than fast tracks!

What do you think? Are you content to take your cash on delisting, and to look for other pastures? Does delisting on a domestic stock exchange worry you when exclusive ownership goes abroad? Please join our forum and let us know what you think. We would love to hear from you!

 


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