Historical Impact of delisting on foreign stocks/companies

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annu
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Historical Impact of delisting on foreign stocks/companies

Post by annu » Fri May 22, 2020 9:58 am

I own bunch of emerging market stocks. Want to know what if there is any impact on me as a shareholder if a company ends up delisted from US stock exchange? If this has happened in part due to performance of the company I can understand effect will be bad, but in case of sanctions for other reasons, where the companies are still performing well, is that an issue to still be owning those companies stocks? Is it still legal as a resident of US to be able to do that?

I am not sure if in past something similar happened with Russia or another country, where companies were delisted, more as a political move then due the performance of those companies, could not find much, but any anecdotes or information will be great

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SimpleGift
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Re: Historical Impact of delisting on foreign stocks/companies

Post by SimpleGift » Fri May 22, 2020 10:40 am

annu wrote:
Fri May 22, 2020 9:58 am
I am not sure if in past something similar happened with Russia or another country, where companies were delisted, more as a political move then due the performance of those companies...
It appears that several Russian companies are still listed on U.S. exchanges, even after the United States imposed sanctions following the 2014 dispute in Ukraine. So forced delisting would seem to be uncharted territory.

Not exactly sure how forced delistings would be implemented, hypothetically. Perhaps companies forced to delist would have to find a way to buy out shareholders. Another option might be a secondary listing elsewhere (say in Hong Kong or London), and then giving investors new shares in exchange for their U.S. stocks.

The impact on investors in diversified index funds (including emerging markets) would be fairly minor, I assume.

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annu
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Re: Historical Impact of delisting on foreign stocks/companies

Post by annu » Fri May 22, 2020 11:03 am

SimpleGift wrote:
Fri May 22, 2020 10:40 am
annu wrote:
Fri May 22, 2020 9:58 am
I am not sure if in past something similar happened with Russia or another country, where companies were delisted, more as a political move then due the performance of those companies...
It appears that several Russian companies are still listed on U.S. exchanges, even after the United States imposed sanctions following the 2014 dispute in Ukraine. So forced delisting would seem to be uncharted territory.

Not exactly sure how forced delistings would be implemented, hypothetically. Perhaps companies forced to delist would have to find a way to buy out shareholders. Another option might be a secondary listing elsewhere (say in Hong Kong or London), and then giving investors new shares in exchange for their U.S. stocks.

The impact on investors in diversified index funds (including emerging markets) would be fairly minor, I assume.
Thanks for your response. I am invested in Asia more, russia was an example as thought something may have happened similar to this earlier. So if you get new shares, does that become taxeable event?

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SimpleGift
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Re: Historical Impact of delisting on foreign stocks/companies

Post by SimpleGift » Fri May 22, 2020 12:01 pm

annu wrote:
Fri May 22, 2020 11:03 am
So if you get new shares, does that become taxeable event?
Really don't know — and an Internet search may not reveal much, since we're far into hypothetical territory here. But since there's now proposed legislation directed at Chinese stocks listed on U.S. exchanges (which is beyond Forum rules to discuss), perhaps tax lawyers have worked on this issue, and you might find preliminary tax opinions on the web.

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annu
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Re: Historical Impact of delisting on foreign stocks/companies

Post by annu » Fri May 22, 2020 12:24 pm

Thanks again. Will try to see if something turns up and update here. Too bad have been doing international based on 3 fund, just had a tilt to Emerging Markets, should have sold them as well. When it rains, it pours I guess....

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annu
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Re: Historical Impact of delisting on foreign stocks/companies

Post by annu » Fri May 22, 2020 12:51 pm

Might be helpful, found below related to EM etf, they are talking about outflow since yesterday

https://www.nasdaq.com/articles/iemg-ba ... 2020-05-21

looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the iShares Core MSCI Emerging Markets ETF (Symbol: IEMG) where we have detected an approximate $242.1 million dollar outflow -- that's a 0.5% decrease week over week (from 1,045,800,000 to 1,040,400,000). Among the largest underlying components of IEMG, in trading today Alibaba Group Holding Ltd


I am hoping someone can share if there is free/publically available way to check ETF outflows? :sharebeer

Editing Post: found one link https://www.etf.com/sections/weekly-etf ... 2020-05-01

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