Compact Disc Ltd is in the news since January 2011 for delisting. It is now almost over 6 months, but delisting has not happened. My view, it will never happen. Reason, delisting is a ploy of the management to manipulate the share price. There are several arguments in favour of my view.
1. The balance sheet is hugely manipulated. The company has no business and thus cash in the books to support the delisting.
2. Why the management will go for delisting ?. Normally the management of this size of companies, would like to keep shares delisted so that they can raise funds at will in future.
3. If the management feels that the share prices are low, they can make creeping acquision. but the management is not doing. The company can also go for buy back, if they have surplus fund.
4. Management holds around only 25% shares. To delist company would require 65% shares out of 75%. This is simply not possible in a listed company. The management understands this, thus this trick of delisting to raise share price.
