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Oil and Gas has lots of physical installations, equipment, sometimes ships,... Even if the value dipped too much, selling every asset, supposing there's a buyer
by a1o 4y ago
Oil and Gas has lots of physical installations, equipment, sometimes ships,... Even if the value dipped too much, selling every asset, supposing there's a buyer available, makes some value. I remember Buffett began buying companies that the assets were valued more than the company perceptual market value and selling everything to recoup the investments. Maybe it's the way to think on these actions?
- locallost 4y agoSelling is not the point. It's a basic strategy pointed out by Ben Graham, that if the company is worth less on the stock market than its actual assets minus debt, it's s no brainer to invest even if the stock is unpopular.
- starkd 4y agoIt is a signal that oil and gas are not going anywhere for a long time. Even if they were buying it for the sale of its assets, those assets would not be worth very much if oil and gas industry were in terminal decline. He is making massive investments in the field because of the prospects of future growth in the long term. He's probably entirely right too, since oil is embedded in virtually everything we do. A thriving economy depends on access to cheap and abundant energy.