Safeguard Scientifics Filed Form 25 to Voluntarily Delist its Common Stock from The Nasdaq Stock Market LLC
- None.
- The delisting of the Company’s common stock from trading on Nasdaq may lead to potential difficulties in trading the common stock on an over-the-counter market or in privately negotiated sales.
Insights
The voluntary delisting of Safeguard Scientifics, Inc. from the Nasdaq and transition to over-the-counter (OTC) markets is a significant strategic move that has immediate and long-term financial implications for the company and its shareholders. In the short term, the reduction in regulatory compliance costs and the administrative overhead associated with being a publicly traded company on a major exchange may positively impact the company's net income. However, it is crucial to consider the liquidity and valuation implications. Delisting often results in a less liquid market for the company's shares, potentially leading to lower trading volumes and greater volatility. Shareholders may find it more challenging to buy or sell shares quickly at fair market prices.
Furthermore, OTC markets are generally perceived as less prestigious and transparent than exchanges like Nasdaq, which can affect investor confidence and, consequently, the company's ability to raise capital. The lack of guarantee that brokers will make a market in the common stock underscores the risk of reduced liquidity and investor access. The transition to OTC trading may also lead to a narrower investor base, as some institutional investors have policies against holding OTC-listed stocks.
The transition from Nasdaq to OTC Markets Group Inc. for Safeguard Scientifics, Inc. reflects broader market trends where small-cap companies weigh the benefits of being listed on a major exchange against the costs and regulatory requirements. It is essential to understand the OTC market dynamics, which are characterized by a decentralized dealer network, where investors may face less stringent reporting standards and higher bid-ask spreads than those found on centralized exchanges.
From a market perspective, this move could signal to current and potential investors that Safeguard Scientifics is prioritizing financial efficiency over the visibility and prestige associated with Nasdaq listing. This strategic shift may align with the company's operational goals and could be a response to industry-specific challenges, such as the need for agility in capital allocation or a strategic pivot that requires a different investor base. The market's reception to this news will depend on the perceived rationale behind the delisting and the company's communication strategy to reassure stakeholders of its ongoing commitment to transparency and growth.
RADNOR, Pa., Feb. 02, 2024 (GLOBE NEWSWIRE) -- Safeguard Scientifics, Inc. (Nasdaq: SFE) (“Safeguard” or the “Company”) has announced today that it filed Form 25 with the Securities and Exchange Commission (the “SEC”) to voluntarily delist its shares of common stock from trading on The Nasdaq Stock Market LLC (“Nasdaq”) in connection with its previously announced plan to deregister its common stock under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and to delist the Company’s common stock from trading on Nasdaq (referred to as the “Transaction”).
The Company expects that the delisting will occur ten days after the filing of Form 25 so that trading will be suspended on February 12, 2024 prior to the market opening, at which point, the Company intends to file a Form 15 with the SEC certifying that it has less than 300 shareholders of record, which will terminate the registration of the Company’s common stock under Section 12(g) of the Exchange Act. Following the delisting of the Company’s common stock from trading on Nasdaq, any trading in the Company’s common stock would only occur in privately negotiated sales and potentially on an over-the-counter market. The Company expects to have its common stock quoted on a market operated by OTC Markets Group Inc. (the “OTC”) so that a trading market may continue to exist for its common stock. There is no guarantee, however, that a broker will continue to make a market in the common stock and that trading of the common stock will continue on an OTC market or otherwise.
About Safeguard Scientifics
Historically, Safeguard Scientifics has provided capital and relevant expertise to fuel the growth of technology-driven businesses. Safeguard has a distinguished track record of fostering innovation and building market leaders that spans more than six decades. Safeguard is currently pursuing a focused strategy to value-maximize and monetize its ownership interests over a multi-year time frame to drive shareholder value. For more information, please visit www.safeguard.com.
Forward-Looking Statements
This press release may contain forward-looking statements that are being made pursuant to the Private Securities Litigation Reform Act of 1995, which provides a “safe harbor” for forward-looking statements to encourage companies to provide prospective information so long as those statements are accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those discussed in the statement. Such forward-looking statements include statements about the perceived benefits and timing of the Transaction, trading of the Company’s common stock following the voluntary delisting from trading on Nasdaq, and the number of holders of record of the Company’s common stock that the Company expects to have after the stock splits. Such forward-looking statements are subject to a number of known and unknown risks and uncertainties that could cause actual results, performance or achievements to differ materially from those described or implied in such forward-looking statements. Accordingly, actual results may differ materially from such forward-looking statements. The forward-looking statements relating to the Transaction are based on the Company’s current expectations, assumptions, estimates and projections about the Company and involve significant risks and uncertainties, including the many variables that may impact the Company’s projected cost savings, variables and risks related to the consummation of the Transaction. The Company assumes no obligation for updating any such forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting such forward-looking statements.
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