For some miners and resource equities, trading in New York is no longer an option.
HALIFAX – Simply put, low share prices amidst the deep and protracted rout in commodities and mining shares are forcing delistings in New York, or at least raising the spectre of delisting, at an accelerating pace.
Two leading exchanges – the NYSE MKT and the NYSE – house numerous mining and exploration companies, many of which are cross-listed in Toronto or elsewhere.
For Canadian-listed resource companies especially, going to list in New York became increasingly popular during the raging bull market in commodities in the mid to late 2000’s and early 2010’s. Suddenly there was a much greater appetite for resource investing in America.
But in recent months flagging share prices of many of these companies has forced many companies to leave, or chose to leave, given stringent regulations in New York.
The NYSE is a dollar-minimum exchange. The NYSE MKT, though less stringent, nonetheless has strong rules that lead to delistings when it deems share prices are too low.
On the NYSE, the rule is simple, and the trigger quick.
Go under a dollar, or go too low in the eyes of the exchange, and you will be notified of impending delisting unless action is taken. Typically the choice is to hope – hope that shares rebound over a dollar – or to act on share structure. That means consolidating shares to buoy stock prices back up over a buck.
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