It’s been a bad week for India Globalization Capital (IGC). The company has been delisted from the NYSE and trading on these cheap stocks has been suspended.
Suspended Cheap Stocks: IGC Delisted
So what’s going on? IGC has in recent months become a popular name in the cannabis sector. And it is because of this that the NYSE has decided to delist this cheap stock. But why?
The company has changed its business venture to something completely different than what it began listing as. In doing this, it has violated Section 1003(c)(i) of the NYSE American Company Guide, which states:
“If the issuer has substantially discontinued the business that it conducted at the time it was listed or admitted to trading, and has become engaged in ventures or promotions which have not developed to a commercial stage or the success of which is problematical, it shall not be considered an operating company for the purposes of continued trading and listing on the Exchange.”
At the time of the halt, ICG stock was trading at $2.49 per share.
Cheap Stocks Change Direction More than Once
IGC has changed its business strategy on more than one occasion. At its IPO it described how its business was targeting acquisitions in the India market. Further, its website indicates the company spent years renting out construction equipment and managing real estate in Malaysia.
However, in a dramatic change of direction and beginning in 2013, the company reported it has been researching cannabis treatments for ailments such as Alzheimer’s, Parkinson’s, and anxiety and sleep disorders.
It also added in September that it would begin research and development on cannabis-infused drinks. On that announcement, this cheap stock rose 500%.
IGC Can Appeal Its Case
IGC now has the ability to appeal the delisting which I expect it will do. Construction machinery leasing and cannabis don’t exactly go hand in hand, so it does make you wonder what caused IGC to change direction so dramatically.
If it chooses to not appeal and/or losses an appeal, it will resume trading in a matter of weeks but on the OTC market and a new ticker will be assigned. Let’s see how this one plays out.
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