Stock exchanges generally impose rules on companies who wish to have their shares traded. If a corporation wanted its shares traded on the New York Stock Exchange (NYSE for short), it would be required to have a certain number of shareholders, a minimum price per share, and a minimum market cap. If at any time the corporation failed to meet one of these criteria, the exchange could delist it, meaning the shares of that particular company would no longer be traded on that exchange.
Delisting became a serious problem for many companies after the dot-com crash of 2000. Faced with bankruptcy, the shares of many technology companies were trading below $1, causing them to be in violation of the minimum price-per-share rule. To prevent this, many companies declared reverse splits.
When a company is delisted, it is a serious sign of financial or managerial trouble and generally causes the stock price to fall.
