See anything wrong here?

Discussion in 'Trading' started by MrDODGE, Mar 17, 2008.

  1. Is negative enterprise value a bad thing? All it really says is prices are a bargain. The same thing happened to legitiment companies after the .com bubble.

    Stock + Debt - Cash = Enterprise Value

    In other words the company has enough Cash to pay off all it's debt and but back it's stock. The question is why?
  2. But how could a bank have that much cash sitting around? Something is odd.
  3. Yeah... why would a bank have cash sitting around?
  4. They are in the spread business meaning they make money when cash is put to work not sitting around.
  5. Enterprise Value is the sum of Market Capitalization + Net Debt + Minorities at market prices – Non Operational Assets
  6. Non Operational Assets aka cash.
  7. So you find it reasonable for them to have more than 251 billion in cash sitting around?
  8. In this market. Where a $10 Billion dollar company can goto 0 overnight, yes.
    #10     Mar 17, 2008