Ryanair will be delisting its shares from the LSE: here’s why

Ryanair will soon be delisting its shares from the London Stock Exchange. Here’s why the company has taken this action and what it means for investors.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

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You may know Ryanair mainly as the airline to use when you need a cheap flight across to Europe. And this notoriety has made the company a household name, leading to the Irish airline becoming one of the biggest travel companies in the UK.

Recently, CEO Michael O’Leary caused turbulence in the market by announcing plans to delist the firm’s shares from the London Stock Exchange (LSE). Here’s why he’s taking such drastic action and what it means for investors.

[top_pitch]

What’s going on with Ryanair (RYA) shares?

A lot of the drama is to do with the after-effects of Brexit. Problems were brewing because EU laws require the majority of Ryanair’s owners to be EU nationals.

Now that the UK is no longer part of the EU, it was announced that as of January 2021, UK nationals could no longer buy ordinary shares in the company.

So, British shareholders’ rights were already restricted as part of the Brexit fallout, but the situation has seen further developments. Now Ryanair is having some major issues with their listing on the LSE because:

  1. It’s too expensive.
  2. There’s been a significant drop in trading volume since Brexit.

When will this change to the listing happen?

The last day Ryanair shares will be trading on the LSE is 17 December. And the delisting of the shares will be fully complete by 20 December.

The company already has a dual-listing. This is where the shares can be found and traded on two exchanges. So, after this delisting, the company will move the ordinary shares to Euronext Dublin (the Irish Stock Exchange).

However, its American Depository Receipts (ADRs) will still be found on the Nasdaq stock exchange.

[middle_pitch]

How will the Ryanair delisting affect investors?

If you’re a UK national, you won’t have been able to buy these shares on the LSE for some months now.

For those of you already holding Ryanair shares, don’t fret. You can still sell them by trading over the counter (OTC). However, only some share dealing platforms will facilitate this and there can sometimes be larger costs involved due to wider bid/ask spreads. 

As for the share price itself, it’s already taken a dive following the delisting news. Added to this, the coronavirus pandemic is still having an impact on the travel industry, so it’s difficult to predict which way the price might fly next.

Where will you be able to buy Ryanair shares in future?

After the delisting, it will still be possible to pick up these shares to include in your portfolio. Firstly, you’ll need a share dealing account that gives you access to international markets. Secondly, you’ll have to arrange to buy them through the Euronext Dublin exchange. Doing this may incur overseas dealing fees. Also, keep in mind it could also affect your tax position from an investment perspective.

There are still plenty of companies and airlines out there for you to invest in if this Irish emerald no longer floats your boat. Just remember that like an aeroplane changes altitude, the value of any investment can rise and fall. So you may get out less than you put in.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be considered so you should consider taking independent financial advice.

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