The Canadian capital markets have a problem. The continued lack of volume on the nations top level exchange, the Toronto Stock Exchange, continues to drive away public firms from listing. And those that are listed here often don’t stay around for long.
Take for instance Vintage Wine Estates (TSX: VWE) whom on Friday evening announced that it will be voluntarily delisting its equity from the Toronto Stock Exchange. The equity is expected to delist from the exchange effective March 7, 2022.
The reason for delisting, as is often used when firms leave the TSX, is that the “trading volume of its Common Shares and Warrants on the TSX no longer justifies the expense and administrative efforts associated with maintaining TSX listing.”
The departure from the exchange is notable for one reason in particular. The firm has only been public for roughly nine months. Vintage Wine Estates went public via a SPAC merger in June 2021, through a $617.9 million transaction with Bespoke Capital Acquisition Corp, which was dual listed on both the Nasdaq as well as the Toronto Stock Exchange. In essence, the company realized in under a years time that there is little need to maintain a Canadian listing.
Vintage Wine Estates is just the latest firm to delist from the exchange as management teams look to cut unnecessary costs from their income statement. Publicly traded companies are quickly realizing that US big boards provide more than enough liquidity, and that the savings in both exchange fees and managerial fees are worth the trade off of losing a listing.
The departure from the TSX follows other notable names that have left recently, such as Village Farms (NASDAQ: VFF), a Canadian cannabis and produce producer, whom left the exchange in December due to a lack of liquidity, citing reasons nearly identical to Vintage Wine Estates. InMed Pharmaceuticals (NASDAQ: INM), whom got its start on the Canadian markets, also recently left shortly after obtaining its top level US listing.
Vintage Wine Estates last traded at $8.30 on the Nasdaq.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
