I was reading this thread about companies potentially needing to go public for regulatory reasons.
Are there any companies that are technically considered publicly traded companies for regulatory reasons, but your average Joe cannot purchase shares because there are literally no shares being offered on any exchange? E.g. the company has technically “gone public” and has been listed on the NYSE, but as of January 1st all of the owners/stockholders simply decide (either together or independently) to hold onto their shares and not sell at any price. Does that legally turn the company into a private corporation by operation of law, or can it remain “publicly traded” in theory or in the eyes of the law in perpetuity, even if years or decades go by with no-one willing to sell?
If no one was willing to sell, then the ask price would be infinity. That tends not to happen because the public stock exchanges have minimum liquidity requirements in order for companies to list. If you can’t scare up enough volume to execute trades, your company will be delisted.
Does being delisted automatically make the company a privately held one, or does it just get forced onto the pink sheets or something?
Also, what would happen if the company adamantly refused to do what is necessary to get relisted (or listed on another exchange or on the pink sheets or something)? Would that turn the company back into a privately held one, would it mean that the company is a publicly traded company who is in trouble with the government, or does it mean that any shareholders who decide to sell must resort to ebay, craigslist, flea markets, classified ads, cold calling, or going door to door?
Pretty much everything is on pink sheets. Pink sheets is just a clearinghouse for information about people who want to trade over-the-counter. Think of it as Craigslist for shares. You can buy IBM or Wal-Mart via Pink sheets, if you want to. Or you can buy bankrupt penny stocks and stuff.
Being delisted means the shares can’t be traded on the public stock exchanges, but people still own all those shares, and the company is considered to be publicly held as long as it has 500 or more shareholders. They still have to maintain their SEC filings and so forth.
If they refuse to do what’s necessary to get relisted, then they won’t get relisted. Companies in these dire straits are generally headed for bankruptcy, anyway. If it’s a healthy company that’s just acting like a turd, then they can expect a shareholder lawsuit and/or board revolt.