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If your tangible assets are worth more than your company, your company is doing it wrong. For the other side of this equation see Japan, and their zombie compa
by JamesBarney 10y ago
If your tangible assets are worth more than your company, your company is doing it wrong.
For the other side of this equation see Japan, and their zombie companies.
- kuschku 10y agoOh, it’s not profitable. The company usually ends up far in debt from selling off the assets, but the shareholders or the interim CEO they forced in aren’t responsible. A common scheme is buying control of a company when it’s in a crisis, selling off all assets and real estate, forcing them to rent the real estate again, then the company goes bankrupt, after having no assets left, and the shareholders made profit, and the company has to pay huge amounts of debt. It’s the usual way of destroying jobs.
- princeb 10y ago> It’s the usual way of destroying jobs. unfortunately, if a company is trading below BV it means it's expected to destroy jobs on its own. better to put it out of its misery quickly than to allow it to run itself to the ground.
- JamesBarney 10y agoWait are you saying that the new shareholders take over a company, borrow a lot of money from a bank. Sell off it's assets. Pay all of it's new found cash out to it's shareholders through dividends. Then goes bankrupt, and screwing over the bank?
- kuschku 10y agoWell, kinda. Sometimes the government has to jump in to save the jobs, sometimes they just move the pension funds for the employees around and find a way to pay that out to the shareholders, etc.