[Beginner's Guide to Stock Investing] It Was There but It Wasn't... Did My Money Turn to Toilet Paper? What Is 'Delisting'?

Editor's Note[Beginner Investor's Guide] is a smart investment guide for 'Beginner Investors (Ju-rini, combining 'stock' and 'child').' We will kindly and easily explain stock stories that are unfamiliar to beginner investors.

[Asia Economy Reporter Kwon Jae-hee] It was a noisy week not only in the coin market but also in the stock market due to the delisting of the virtual currency 'Wemix' issued by the game development company Wemade.

Following the Wemix delisting, related stocks including Wemade, Wemade Mix, and Wemade Play also plummeted one after another.

Wondering what the delisting of a virtual currency has to do with stocks?

Just as investors' money instantly becomes worthless with Wemix delisting, there is also a risk of delisting in the stock market.

We will tell you the delisting requirements and how to identify stocks with a high possibility of delisting.

What is Delisting?

The stocks we trade are listed on the KOSPI or KOSDAQ markets.

Delisting means being unable to trade in these markets and being kicked out of the market.

In other words, it is equivalent to a death sentence.

How to Recognize Delisting Signals?

The thought that the stocks I own could become worthless.

For stock investors, nothing is more frightening than delisting.

However, stocks with a high possibility of delisting show pre-delisting signals.

That is the 'Managed Stock' designation.

Managed stocks can be seen as a pre-delisting stage.

Managed stocks are designated to alert investors to be cautious in investing by warning that the stock may meet delisting criteria, and to encourage companies to normalize their status.

Stocks are designated as managed stocks if

▲ the listed company fails to maintain the minimum liquidity required, or

▲ due to worsening business performance or other reasons, the company is at risk of meeting delisting criteria.

Once designated as a managed stock, trading may be suspended for a certain period, and margin trading on the stock may be prohibited.

In other words, it means 'This company may be delisted, so please be cautious when investing.'

Delisting Requirements Differ Between KOSPI and KOSDAQ

The delisting and managed stock regulations differ depending on which market your stock is listed on.

KOSDAQ is somewhat stricter than KOSPI.

Most companies subject to delisting or managed stock designation have ▲ deteriorating performance ▲ embezzlement or breach of trust by management ▲ audit opinion rejections.

In other words, if there is a sharp decline in sales,

or large-scale continuous losses,

or issues with the morality of management, you should be especially cautious with your investments.

Your precious stocks should never become worthless due to reckless investment.

While losses may occur in stock investment, at least delisting can be prevented if you pay attention to it.

We hope beginner investors never face frustration due to delisting, and we conclude by emphasizing delisting signals once again.

We support your wise investments today as well.