1. Daedong Electronics Delisting: What Happened?
Daedong Electronics received a ‘qualified’ audit opinion in both 2023 and 2024. The core issue was impairment of investment in an affiliate, ZEGNA-DAIDONG LIMITED. Despite submitting an improvement plan, the company failed to meet the exchange’s listing requirements, leading to the delisting on July 31st.
2. Why the Delisting?
A ‘qualified’ audit opinion raises serious questions about a company’s financial health. It hinders transparent information disclosure to investors, leading to a loss of market trust, which can ultimately result in delisting. In Daedong’s case, the unresolved uncertainty surrounding the affiliate’s investment impairment was the decisive factor.
3. Delisting Impact: What Does it Mean for Investors?
Delisting can lead to significant losses for investors. Trading becomes restricted to over-the-counter markets, where decreased trading volume and liquidity make selling difficult. Share price decline is inevitable, and in the worst case, investors could lose their entire investment.
- Risk of investment loss
- Trading restrictions and decreased liquidity
- Increased uncertainty due to lack of information
4. Investor Action Plan: What to Do Now
Investors need to assess the situation calmly and react swiftly. Check the possibility of trading in the over-the-counter market and expected prices. Consult with financial professionals to develop strategies to minimize losses. Continuously gather information about the company’s future plans and financial status.
Where are Daedong Electronics shares traded now?
After delisting, shares are only traded on the over-the-counter (OTC) market.
How do I trade on the OTC market?
Contact your brokerage firm for guidance on OTC trading. However, be aware that liquidity is low and trading may be difficult.
What will happen to the share price after delisting?
Share prices typically plummet after delisting. While precise predictions are impossible, investors should prepare for potential further losses.
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