4 ms·
For this reason I’ve never heard of a stock which is selling at less than assets minus debts for very long. It’s an easy hostile takeover + fire sale situation.
by lazide 2y ago
For this reason I’ve never heard of a stock which is selling at less than assets minus debts for very long. It’s an easy hostile takeover + fire sale situation.
So I’m doubting that is what is really happening here?
- manquer 2y agoIt does happen for many reasons and not uncommon, uncertainty and risk is typically why. There isn’t one single value, value derived ( let alone perceived) is subjective In this case, The stock is worth more(or less) to the 49% shareholder than others who are may value the founder holding defacto controlling stake negatively, thus discount the stock less than its book value . This is also why sometimes same class of shares held by different people get priced (i.e. valued) differently in a single deal. Recently the paramount one is a good example . Another famous example Yahoo was valued negatively for a long time before its sale to Verizon, I.e. its market cap was less than the value of its alibaba holdings . One off events like county cases , drug trials likelyhood of a merger approval from regulators are hard to price accurately and can skew.
- hnfong 2y agoFWIW, it's very common for stocks listed in the Hong Kong stock exchange to have its share price below assets minus debts..