JSE Suspensions and Delistings: What Happens to Your Shares

0:00 Welcome back to another episode of the Money Mice, the podcast, all South African retail investors who want to start feeling like they're drowning in jargon and start navigating the markets like someone who actually knows what they're doing. I'm your host Jay, and today we opening the haunted cupboard in your portfolio, the one way shares used to live but now it's mysteriously vanished like your socks in a tumble dryer. Yep, we're talking about JSE suspensions, delistings and what actually happens to your shares when a company disappears faster than tender money in a dodgy municipality. If you've ever stayed at a grayed out ticker wondering whether you've just been coasted, well, grab a seat, we're going to go in.

0:43 Suspensions are basically the Jsc's way of telling a company you've messed up. Go stand in the naughty corner until you've sorted yourself out. The company still exists, you'll stay still exist, but you can't trade them. They frozen in time like that left over pie at the back of the freezer from December 2019. So why does this happen? Well, there's a few reasons.

1:07 One, they must have deadline to publish results. They suspicious trading activity think it's smells like a fish market at low tide type of situation or their financial statements are shakier than a camping chair. After few brandies and water and justice like school detention, suspensions can be shortened, sweet or drag on for ages. Some will lifted in a few days, others hang around longer than that one mate who just popped in for one drink and is still there at midnight eating your biltong while your wife gives you the side eye from the passage. For investors, a suspension is frustrating. You can see your shares but you can't do anything with them. It's like owning a sports car and then finding out your keys out with your ex and she's not answering the phone calls. So delisting.

1:54 So it's the breakup you didn't ask for. If a suspension is detention then relisting is full on expulsion. The company shares are removed from the Jaise permanently. This isn't the let's take a break conversation, it's morer. We moved out, we've taken the TV and the Wi-Fi password has changed kind of breakup. So why do companies delist? Well they're going private.

2:18 Someone bought the whole company and decided the Jses too much admin. It could be too expensive to stay listed. Being on the JSE comes with fees and compliance costs that make renewing your car licence cheap, and in there's a failure to meet requirements. If you can't tick the jazz boxes, well you get the boot. There's also voluntary delisting, the polite exit where the company says thanks for everything but we're heading out of town. Then there's involuntary delisting. The unceremonious kick out with the JSC says you're not paying rent.

2:50 Pack your stuff and leave. Either way, once they gone your shares contract on the JC anymore. Imagine your favourite coffee shop closing. You can still make coffee home but it's not the same and you can't Instagram it without people judging you. So what happened to your money? Did you lose everything? Well the short answer is not necessarily. The long answer would be it depends and it's not always pretty. If a company is suspended, your shares are still there, they just locked in your account like a birthday present you're not allowed to open yet.

3:24 If the company fixes the problem they can be reinstated. If not they might slip into delisting. And this is where things get complicated. If a company did lists because it was bought out, you might get cash for your shares, shares in the new owner, or a combination of both. But if a company dealers because it's sinking faster than a lilah was a slow puncher, you the last for the payout queue behind the employees, creditors, saws, the cleaning lady and possibly the oak watered offers planting 2018. Here's the plot twist.

3:59 Delisting doesn't always mean your shares are worthless. Sometimes they move to an OTC market, the financial equivalent of buying Avos from the boot of someone's car in a parking lot. It works, but it's not glamorous and you probably not getting the price that you really want. Other times the company did lists locally to list somewhere else. This is great if you can trade there, but often you can't.

4:24 It's like being invited to a party in an exclusive club, but you're wearing flip flops and the bouncer just laughs. And yes, there are cases where a company remains suspended for years, your shares sit there collecting dust while you occasionally click on them Sai. And then you close the app again. So let's look at a few what if scenarios for investors that they don't really think about.

4:48 Partial payouts. Sometimes you get an offer for some of your shares, not all of them. You accept and now you've got cash and a smaller still delisted holding. You might have missed a deadline cause offers often have an expiry date must them. And your payout might be delayed or worse, forfeited. Might move to an exchange you can't really access. So if they move overseas, you might have to open a foreign trading account just to sell. And the fees alone can eat your gains. So let's look at your Survival kit. If you spot a suspension or year whispers of a delisting, where do you get the information?

5:24 Well, read this sense announcements. Yes, I know, they're about as fun as watching paint dry, but they the truth in black and white. Know the timeline. There will be deadlines for voting or accepting offers. Mark them in your calendar. Set reminders. Hold. Do a tattoo on your forearm if you have to. Evaluate the offer. Sometimes cash now beats the risk of holding an untradeable stock.

5:48 Most importantly, don't panic, but don't nap either. You can't control the company's mess, but you can control how quickly you respond to it and ask questions. Brokers, transfer secretaries, even the company's investor relations team. It's their job to explain this to you. So let's get to our stocks. I'll start the back of stock lingo for this.

6:09 Volume 24 suspension is trading. Frozen shares still exist, like your uncle's Bucky waiting for parts for the past five years. The risk is frustration and uncertainty. Delisting a company leaves the Jaise permanently. The risk on this one is the loss of easy trade access. Then you've got voluntary delisting.

6:30 A company chooses to leave often for a buy out. Your risk they is you need to act on an offer if there is one in voluntary delisting. No, that's kicked out for not meeting requirements. And the risk here is a potential total loss. Your money well could be cashed out, swapped for other shares, or vanish into corporate bankruptcy limbo. And while my jokes may be suspended more often than politicians ethics, remember this is not financial advice. Please do your own research or speak to a licensed financial advisor.

7:04 But catch you next time. Same time, same place, same sarcasm.