The Research On The Strategy-based Delisting Of Listed Company

To be one of common development means, listing serves for company's target. In a mature capital market, listing can help company create more development opportunity via listing profit - financing and resources distribution optimizing. However, listing has its price. The benefits and prices of listing are not invariable; they will change as the company goes into different development phase. For listed company, if company already realized its target made before listing, and the price of listing higher than profit, this company should reset its goal and re-value the listing's influence to company. Strategy-based delisting, to be one of active delisting, can help certain companies to pursue new development target, those companies which already realized its target made before listing and the price of listing is higher than profit.According to the features of stock markets, 6 common delisting methods are available, they are asset divestiture,company division,company spin-off,share repurchase,oriented transfer and voluntary liquidation. This article analyze the advantages, disadvantages and applicable condition of each method, takes UTStarcom for example, exploring the reason, methods and meaning of the delisting process made by a listing company.UTStarcom, one listing company of NASDAQ, has the rapid growth during the initial development period with the abundant capital from listing its leading technology on PHS. While, with the wrong decisions on developing, UTStarcom starts to fall down from 2004, the stock price falls from $40 to $2-3. Under the pressure to improve its financial situation, UTStarcom takes layoff for 3 times, CEO-WuYin also is forced to leave company. Let's look at the original target set by UTStarcom, which almost be realized after listing. At this time, UTStarcom still need to pay high listing price, under stokeholds' pressure and even facing the risk to be viciously purchased. If UTStarcom already realized its target made before listing, and the price of listing higher than profit, UTStarcom could try to pursue the better development by Strategy-based delisting.This article analyzes the state of UTStarcom,its listing benefits,costs and its goal, using the financial statements of UTStarcom, the rules of NASQ and delisting case of TOM online, make the delisting decision for UTStarcom via Share repurchase. Comparing its advantages and disadvantages, advantages is more than disadvantages.According to the Strategy-based delisting case of UTStarcom, this article exploring the possibility of strategy-based delisting been adopted for further development under certain conditions (Listing price higher than listing benefits, company almost realizes its listing target or don't need listing any more), and how to choose the method of strategy-based delisting.