What is the listing of shares on the stock exchange?

They say you can’t step into the same river twice and make the first impression again. This is true for the stock market as well. That is why entering the IPO, that is, the initial placement of securities on the stock exchange, is such a significant moment for a public company.

What is the listing of shares on the stock exchange?

To make the offering profitable for themselves, owners and top managers must give potential investors the right impression of themselves and their business. For the sake of these goals, on the eve of an IPO, a large-scale and expensive “road show” is often held, at which investors are presented with the company’s past successes and set ambitious goals for the future. A well-done preparatory work and the presence of a good moment practically guarantee the organizers a rush for shares and a high placement price.

But the reverse situation also happens – when the controlling shareholders, for various reasons, no longer want to own a public company and strive to make it private again. Then they, having completed all the required legal procedures, delist the issuer’s shares from the stock exchange.

But what if, after some time, the owners of the business again want to place the company’s shares on the stock exchange, that is, re-IPO? This is possible and has happened more than once in the history of stock trading.

What is relisting?

Relisting is the process of re-inclusion of securities in the quotation list (list of securities admitted to trading on the stock exchange). Unlike an initial public offering, a relisting is an IPO of a company that was once already traded on the market, but delisted its securities.

Why do companies return to the stock exchange?

Since no two companies are the same with the same history, the reasons for re-listing on the exchange can be very different. The most common of them are:

  • Change of ownership and business strategy.
  • Changing market conditions.
  • Improving financial performance.
  • The desire of business owners to go into cash and get the market value of their shares.
  • A way to raise cheaper money to develop or take over a competitor.


Is it worth participating in relisting?

There can be no unequivocal answer to this question, since the situations in which a relisting is carried out can vary significantly, as well as the market valuation of a business at the time of placement. Each new case must be considered individually and remember that the owner always tries to choose the best period for placement in order to sell a share in the business for his own benefit.

What is the listing of shares on the stock exchange?

At the same time, companies re-listing on the exchange have one advantage for a private investor – the presence of a public history in the past. This makes it possible to analyze how the company’s management acted before, what results the business showed after the IPO and before the delisting, what caused the company to leave the exchange and why the current owner decided to return, and how the business has changed during the issuer’s absence from the stock market.