Vultures Going After Negative Enterprise Value

from the pennies-for-dollars dept

There are a number of companies out there that have a public valuation less than the cash they have on hand. To some people, those situations are ripe for a buyout and liquidation. Pay some money now, and simply walk away with the cash. There are difficulties involved, but there are apparently at least 750 such companies out there right now, and some “vulture capitalists” are going after them. It seems the preferred method is to buy up a bunch of shares, wage some sort of proxy fight, hopefully take over the board, and then force the company to cough up its cash. There obviously are some companies where this probably makes sense – however, I imagine there are some others that could actually do something valuable with the cash they have on hand which could provide a bigger return for their shareholders.

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Comments on “Vultures Going After Negative Enterprise Value”

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Kuppy says:

Negative enterprise values

Where can I get a list of the 750 companies with negative enterprise values?

We have a company which we would like to offer to a company that has cash and is looking for an operating company with sales of about $100 million and profits of more than $2 million.

This could easily fit into a public shell with cash.

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