All major stock exchanges have some sort of filing requirement for listed companies. This requirement helps ensure transparency in the company's financials and accounting, and this aids investors in the decision-making process. When companies don't meet their reporting deadlines, not only do they have to worry about repercussions from the exchange they're listed on, they also have to worry about sanctions from the Securities and Exchange Commission .

Stock performance is another factor in determining whether or not a company will retain the privilege of being listed on an exchange. Major stock exchanges want to exude a certain air of stability and establishment to the investors who use their services. Because of this, companies whose stocks don't meet minimum performance requirements (such as a minimum bid price of at least $1 for the Nasdaq and New York Stock Exchange ) for a given amount of time will receive a deficiency letter telling them to shape up or lose their spot on the exchange.

Both the NYSE and Nasdaq offer their listing requirements online:

Once a stock has been delisted from its exchange, it enters the hard-knock world of the penny stock . Penny stocks trade on "over-the-counter" (OTC) exchanges such as the OTCBB and the Pink Sheets . Penny stocks are basically low-priced, high-risk investments. They aren't something that new investors should mess with ( "Ask TheStreet: In the Pink" ).

What Delisting Means for Shareholders

Ownership of stock in a company doesn't change just because the company has been delisted. You still own those shares (sorry, even if you don't want to) and have the same equitable claims to a portion of the company's assets in the event that it were to dissolve.

You will also retain the right to vote your shares at the annual shareholders' meeting. (May I suggest taking a good look at that proxy statement next year.)

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