China, Alibaba, and You: What a Delisting Would Mean

In the event that the Trump administration forces Alibaba and others to delist, shareholders will still hold their shares. However, in the absence of an efficient stock exchange acting as a secondary market, monetizing those shares may become difficult for shareholders. There may not be a counterparty to buy the shares. If the delisting happens with a warning, investors may flock to sell their shares in these companies before the formal delisting, driving stock prices down. Having already raised the capital, the companies won’t be affected much unless they have plans to raise more in the near term.