Question

1. In response to the Sarbanes-Oxley Act, many small firms in the United States have opted to "go dark" and delist their stock. Why might a company choose to go this route? What are the costs of "going dark"?

Answer 1

The small firms opted the root of "go dark" because Sarbanes-Oxley Act can required several millions dollars for its compliance which will lead to no profit margin for a small firm.Thats why delisting of stock is done otherwise they have to comply with SOX Act.

The firm's will no longer access the public market if they want to raise money because of opting for "go dark".They can raise funds through banks or private equity but the cost of which will be much higher.