Why do companies delist voluntarily from the stock market?

•We analyze the motives and market valuation of UK firms that delist voluntarily.•These firms came to the market to rebalance their balance sheet.•They delist when they are not able to raise equity to pay back debt.•They generate negative excess returns in pre-event and on the announcement date.•They destroyed shareholder value and failed to take advantage of their quotation. We analyse the motives and market valuation of voluntarily delisting from the London Stock Exchange. We show that firms that delist voluntarily are likely to have come to the market to rebalance their leverage rather than to finance their growth opportunities. During their quotation life, their leverage and insider ownership remained very high, they did not raise equity capital, and their profitability, growth opportunities, and trading volume declined substantially. They also generate negative pre-event and announcement date excess returns. These results hold even after controlling for agency, asymmetric information, and liquidity effects, and suggest that firms delist voluntarily when they fail to benefit from listing. Overall, these firms destroyed shareholder value and they should not have come to the market.