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See anything wrong here?

  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.
     
  9. thanks dodge for the findings.. UBS case is interesting indeed,, and just earlier today they also announced 8K layoffs
     
  10. Can someone better explain what is going on here?
     
  11. the banks are in hedge fund trouble and i doubt its got much to do with subprime debt,how many new loans were issued in the last 5 years on bad credit,the economy has been strong and people have been making tons of cash, so not enough of these loans to total 3or 400 billion thats fed is backing with, i say that hedge funds have been raping the banking system and they knew about it and could do nothing,too late to regulate it now after damage has been done, now hedge funds are dumping the leftover sawdust from the gazillion dollars they made on the sheepish us banking system, if bernanke and the boy s dont pay for it ,we'll go under,now when these banks do go from 60 to 2 dollars the gazillionaire hedge funds will be there to buy them
     

  12. So your saying all this money is dissappearing into the coffers of hedge funds and nothing to do with subprime or the fact that banks chased profits and allowed even the homeless to buy houses and 2 flat panel tvs for each room? Paulson and Co made 2bill+ on the disaster in the IBs. Please name one other hedge that made out with huge profits.

    Strong economy? Buying things using houses as equity + record trade deficit + jobs going overseas + record inflation + devaluing of the dollar vs other currencies + host of other things = strong economy?
     
  13. the feds and banks had no idea what hedge funds were or are up to,it is possible,probable that these mortgage loans were resold several times ,we will never know,but when the shit hits the fan we have to pick up the tab, they brought one retired cleaning lady( they made sure to find a black one) in front of the senate panel to represent the sub prime borrower,blaming the whole mess on bad risk debtor, guilt thru association, on cspan,what a media mrkting ploy for blame game, as far as finding a fund that made out, try to find out what the employees of those offshore funds raked in in the last 5 yrs
     
  14. Don't forget that the several hundred billion of illiquid paper is not valueless, it is just illiquid at the moment, as nobody knows yet what fraction of these debt obligations will actually have to be written off in the final analysis.
     
  15. Ok for everyone that does not understand.

    Enterprise value = equity + debt-(cash short term securities)
    or the actual value for the entire company if it was bought at the market because you would not pay for the cash.

    It is fine for a bank or broker to have a enterprise value that is a -ve because customers accounts are counted as a debt/liability and that cash is also counted as cash or short term holdings. So when a automated service(like yahoo) calculates EV it subtracts the customers cash balances but includes the customer accounts as a debt. This makes the EV negative. To find the true value you have to remove customer account balances form the calculations.