Twitter’s Stock Will Be Delisted From the New York Stock Exchange

In Business, Tech, World
October 29, 2022
Twitter's stock will be delisted

It’s been a rough year for Twitter and its investors and the latest news about Twitter’s stock has erupted another fire in the New York Stock Exchange. Earlier this month, reports surfaced that the company had lost 10 percent of its users over the past year, and its stock was at an all-time low. Now, in what should be a blow to Twitter’s confidence, the New York Stock Exchange has announced that it will be delisting Twitter’s stock from the exchange by November 8.

Why Twitter’s stock will be delisted?

Twitter’s stock has plummeted since it went public in 2013 and is currently trading at $17.10 per share, which is well below the listing requirement of $20.00 per share. Twitter will be delisted on November 8th, but they have time to raise their stock price before then.

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If they can’t raise their stock price, they will be listed as a penny or OTC company. According to OTC Markets Group Inc., OTC Markets Group Inc., the operator of financial markets for 10,000 U.S. and global securities, today announced that it expects that following the delisting of its common stock from NYSE, Twitter will join its ranks.

The social media company had attempted an IPO back in 2013 when they sold shares for $26 each. In 2017, Facebook reported over 2 billion monthly active users whereas Twitter only had 328 million monthly active users. Unlike Facebook, the majority of people who are not already registered with Twitter find it difficult to get started with posting messages on this site.

Once you sign up for your account and start tweeting, there is no way to save your tweets unless you use a third-party app like Tweetdeck or Tweetbot.

What does it mean for Twitter users?

If you own Twitter’s share, you will still be able to trade them after November 8. However, NYSE rules require that listed companies have at least 500 shareholders and $1 USD in market value. Twitter does not meet these requirements. If your shares are held through a broker or bank, you may need to make other arrangements for trading. For example, if you hold stock through Charles Schwab, they will provide instructions on how to convert the stock into an over-the-counter (OTC) security.

OTC stocks can only be traded by phone or electronically via brokerage services. Other companies that do not meet the NYSE’s requirement of having 500 shareholders include: Netflix, Gap Inc., Nike Inc., and Sirius XM Holdings Inc.

How does Twitter’s stock delisting affect advertisers?

Advertisers who use Twitter to promote their products or services are seeing a decline in engagement. As advertisers see lower engagement on their Tweets, they may choose to spend their advertising dollars elsewhere. Since ads were not being clicked as much as before, marketers were unable to get much out of their ad budget. This will result in more money spent by advertisers on other platforms like Facebook and Instagram.

If marketers cannot make use of this platform anymore due to low engagement, it can result in declining revenues for the company. The stock price is also likely to drop significantly when Twitter’s stock is delisted from the New York Stock Exchange. The fear of further declines could lead traders to sell shares even if there was no real change in how profitable the company was at that point.

What next?

With their stock delisted, Twitter will no longer be required to publish quarterly financial reports. This may result in less transparency as they shift away from being a public company. Investors are now left with two options: either to buy private shares or wait and hope that Twitter’s stock rises again on an over-the-counter market.

The former has come under scrutiny because some believe this practice is unfairly inaccessible to everyday investors. If enough shareholders sell their shares after November 8th, then trading of these stocks will stop completely. It’s likely that all of the major shareholders have already sold their stakes, but there is still room for smaller ones to do so.

It remains unclear how long it will take before someone offers Twitter buyers a reasonable price per share; it could be days, weeks, months or years. Regardless of when that day comes, if you own Twitter stock it would behoove you to sell them before November 8th.

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