This struggling ASX BNPL share is delisting. What does this mean?

It was last drinks for the Zebit share price yesterday…

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Key points

  • Sometimes when ASX shares leave the market, it leaves a pleasant aftertaste
  • But this can't be said for the departing Zebit 
  • This ASX BNPL share is leaving our sharemarket to continue as a private US company

Sometimes when a share delists from the ASX boards, it can mean good things for shareholders. Take the share price of Ramsay Health Care Limited (ASX: RHC) today. Ramsay informed the markets this morning that it had received a takeover offer.

If accepted, it would mean the company would exit the ASX and shareholders would get a significant premium on recent share pricing. This deal is not set in stone and could well fall through. But it gives an example of when an ASX exit can be a good thing for investors. Alas, it seems the opposite might be occurring for the Zebit Inc (ASX: ZBT) share price.

Zebit shares last traded at a price of 4.3 cents each yesterday afternoon. And that might be the last price the company ever receives from the ASX. That’s because Zebit has now officially been suspended from the ASX boards. That means its shares are no longer eligible to trade — bought or sold — on the ASX. It will officially depart our sharemarket on Friday 22 April.

Zebit share price departs ASX boards

It’s not the end for Zebit the company though. Zebit’s ASX listing was actually a CHESS depository interest (CDI). This means that the ASX listing was only a mirror image of the company’s ordinary shares. Its true stock is domiciled in the United States. However, the company does not trade on a share market stateside. So if investors still own Zebit shares, the following is their only option, according to the company:

If CDI holders do not sell their CDIs prior to [today], their CDIs will, following delisting… automatically be converted into shares of common stock in the Company at a ratio of one share of common stock per CDI. Holders of shares in common stock will then only be able to sell their shares to willing purchasers in accordance with the Company’s By-laws and the applicable laws of [the US state of] Delaware.

The buy now, pay later (BNPL) company first announced this move to investors back in February. At the time, it justified the move by highlighting the company’s lack of ASX liquidity, the high cost of maintaining a public listing, capital requirements, and the volatile valuation the market has placed on Zebit over time.

At the time, this announcement sparked a savage selloff, with the Zebit share price cratering by more than 60%. Between March 2021 and yesterday, Zebit shares gave up more than 97% of their value. Since February, the shares have lost even more steam.

So it looks as though it’s the end of the ASX road for Zebit which will continue life as a private company in the US from now on.

Motley Fool contributor Sebastian Bowen owns Ramsay Health Care Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ramsay Health Care Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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