This Monday, construction equipment specialist Caterpillar(NYSE: CAT) became a bit less of an international company. It withdrew its listing from a prominent stock exchange overseas, and investors weren't happy that its presence was shrinking. They traded the company's main (i.e., U.S.-listed) shares down by 4.4% in price the following day, which was a steeper dive than the S&P 500 index's 1.6%.
The French delisting
Caterpillar will no longer have a presence on the Euronext Paris, the company announced. This follows what it characterized as a "comprehensive review," of its Paris-listed stock, which it said suffered from notably low trading volume. Citing the costs and requirements of administering those shares, it requested they be delisted. The request was granted by Euronext Paris's board of directors.
The delisting is to occur on May 28, with the last day of trading set for May 27.
This appears to be the start of a general retreat from European equity markets. Caterpillar added that it plans to make a similar move to delist its shares from the SIX Swiss Exchange. It hopes this will be finalized by the end of this year.
Caterpillar emphasized that foreign investors wanting to remain or become its shareholders purchase its New York Stock Exchange (NYSE)-listed shares. It added that holders of the Paris-listed stock can sell it via the NYSE by going through a "centralizing agent," tasked with handling these transactions. This entity is storied French bank Societe Generale, and the window for effecting the sales will be open from May 3 through May 16.
No real negative impact on operations, but...
While this move won't impact Caterpillar's core business, if at all, it doesn't do wonders for its prestige and reputation. The most important blue chips on the U.S. market are also popular overseas, with more than a few being traded on foreign bourses. Now, Caterpillar looks less of a world-beater than those peers.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
