Determining Factors for Delisting of Companies Listed on BM&FBOVESPA

Abstract

Traditionally, the capital market has attracted the interest of scholars and researchers, motivated to understand the process of going public and trading securities of companies on a stock exchange. In this research context, an aspect had been neglected, something which indi cates a gap in the body of knowledge about the capital market and corporate governance: delisting of companies. We aim to identify the determining factors for delisting companies from the Commodity & Futures Exchange BOVESPA (BM&FBOVESPA). Methodologically, this research has related a set of variables collected from secondary data available on the database of the Securities Commission of Brazil (CVM), BM&FBOVESPA, and Economatica. By analyzing 227 listing cancellations, between 2001 and 2012, the results indicate that de listing of companies from BM&FBOVESPA is determined by the following factors: (i) greater concentration of ownership and control; (ii) lower free float; (iii) lower liquidity of shares; (iv) greater availability of cash; and (v) larger size. The fact that the controlling shareholder is a public or private company determines significant differences in the decision to delist. While in the first case cash availability is the most important factor, in the second liquidity is the main determining factor for delisting. From the academic viewpoint, this research extends the studies on delisting, still incipient in the Brazilian capital market context. For the capital market, identifying the characteristics of companies prone to cancel listing may prevent investors concerned about inherent risks at the time of acquiring shares by the controlling group interested in delisting.

Keywords

• governança corporativa
• companhias abertas
• fechamento do capital