Trade Alert: Closing AXIA on the ADR Delisting
Closing AXIA. The board's decision to delist the ADRs will thin liquidity and widen spreads for anyone holding the US line.
Today I closed AXIA at a slight loss of -0.6%, against a cost basis of $9.77.
The reason is simple. In April the board approved delisting the ADRs to concentrate trading in a single listing, the ordinary shares on Brazil's B3 exchange in São Paulo. Management's logic is that the ADRs make up just 2.5% of the shareholder base, so pulling them consolidates liquidity at home and lines up with the company's move to the Novo Mercado governance segment.
It's a disappointing way to exit. I picked AXIA in January…
… and the shares hit my target within three months.
Holders with Interactive Brokers or a Brazilian broker can ask for the ADRs to be cancelled and take delivery of the ordinary shares instead. I looked at it, but most of my subscribers can't trade on the Brazilian exchange, so I'm closing the position in the model portfolio to keep the tracking clean.