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That only holds true if the market is purely rational which it is not.
by maaanu 5y ago
That only holds true if the market is purely rational which it is not.
- BbzzbB 5y agoConglomerates tend to be valued less than the sum-of-the-parts, getting control of conglomerates to spin off their businesses is a common active investing tactic. Breaking FB up is likely to unlock value for shareholders rather than hinder it. At least, short term as far as stock valuations go, a "markets are irrational" stance works in favor of this theory as it (the market) gets to speculate on every sub-business individually. Long term there are advantages to being under a single banner, like subsidizing Oculus growth and R&D through profits from the social medias to capture long term market share (like Amazon can subsidies retail with AWS, Alphabet can subsidies its "Other bets" with Search, etc).