Delisted
A company removed from the exchange, and usually from the databases too.
A stock is delisted when the exchange stops trading it. Sometimes the company was bought and the shares were exchanged for cash or for shares of the buyer. Often it is the other ending: the company went bankrupt, could not meet the listing rules, or simply faded until nobody would quote it. Either way the ticker disappears.
The trouble starts afterwards. Many price databases quietly drop the delisted names, or keep only the ones that are still alive today. A test run on such data only ever sees the survivors, and survivors, by construction, did not go to zero. The average return of that list is higher than the average return anyone could actually have earned, because the losers were erased before the count.
For a strategy that bets against hated stocks the damage runs the other way. The names people were shorting are exactly the ones most likely to have died, so removing them removes the strategy's best months. That is why the logbook keeps asking for universes that include the dead, and treats any result measured without them as a promise rather than a measurement.
Explore the diagram (scroll horizontally on small screens)
Where this word comes up
First needed in the log entry H-059 · Testing the shorting premium: what a rebalancing bug taught us.
From the same entry: Borrow fee, Crowded shorts, Decile, Long-short portfolio, Rebalance, Recall, Short interest percentage, Short selling, Squeeze, t statistic, Universe.