The reaction came swiftly. Gagfah’s share price plummeted after it announced its exit from the stock exchange in April 2015.
The move, which followed the real estate company’s acquisition by then-competitor Deutsche Annington, now Vonovia, left shareholders with nothing.
It’s a scenario that German lawmakers would like to prevent in the future. On Wednesday, the Bundestag’s financial committee agreed on a proposal to better protect investors against price drops that result from a delisting.
According to the proposal, investors will be compensated when corporations withdraw from the stock market. The amount they receive will be based on the average share price in the six months prior to the delisting’s announcement.
The new rule beefs up a previous measure proposed by the government, under which compensation would have been based on the average share price in the three months prior to the delisting announcement.