Frankfurt Exchange

Fleeing the Stock Market

Now you see me, now you don't. Source: dpa
Now you see me, now you don't. Companies are delisting from the Open Market.
  • Why it matters

    Why it matters

    If the new regulations provoke a rush of companies delisting from the stock exchange, it is the shareholders who stand to be the main losers.

  • Facts

    Facts

    • Germany has a main stock exchange and secondary, lightly regulated “Open Market.”
    • Both are managed by the German Börse at the the Frankfurt Stock Exchange.
    • Rules for companies listed on the Open market will be tightened in 2016.
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  • Audio

    Audio

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April 7 was the last day Primion Technology traded on the Börse, the German stock exchange. The German security technology company delisted because the company’s directors found the listing too expensive. Spanish technology company Azkoyen had taken over the business  and controlled 90 percent of the shares.  Other shareholders, fearing that they would not be able to get rid of their shares after April, sold them at a loss.

A delisting like this is mostly a bitter experience for shareholders. According to a study by Solventis Bank, in 2014 shareholders lost on average 18.9 percent in the first three months after a company announced it would be pulling out of the stock exchange.

More companies may pull out of the Börse in the future, fleeing from new regulations that give shareholders more rights, after a new directive from the European Union goes into effect in 2016.

“Compared with German securities trading law, the new directive is a tightening of the law to the benefit of the investors,” said Kai König, a partner at the Munich law firm Dornbach.

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