Breakup Value

Breakup Value
The sum-of-parts value of a publicly traded company. This value is derived by analyzing each business segment of a company independently. This is usually applied to large cap stocks that are likely to operate in several different markets or industries. A breakup value analysis may be brought about by investors if the market cap of the stock is less than the breakup value for a prolonged period of time.

If a company is performing poorly, or the stock has not kept up to the perceived level of "full value", investors may call for the company to be split apart, with proceeds returned to investors as cash, stock in spun-off companies, or a combination of both.

Investors can also calculate a breakup value on a perfectly healthy company as a way to determine a potential floor for the stock, or a potential entry point for a prospective buyer. In order to accurately calculate a company's breakup value, detailed data is needed on the revenue, earnings and cash flows for each distinct operating unit of the company. From there, relative valuations based on publicly-traded industry peers can help to derive a value for the segment as a spun off stock.

Investment dictionary. . 2012.

Игры ⚽ Поможем написать реферат

Look at other dictionaries:

  • breakup value — noun : the value in liquidation especially of shares of stock of a financial corporation * * * breakup value UK US noun [countable] [singular breakup value plural breakup values] …   Useful english dictionary

  • breakup value — UK / US noun [countable] Word forms breakup value : singular breakup value plural breakup values business the amount that a company would be worth if all its assets (= everything owned by the company) were sold …   English dictionary

  • breakup value — noun Date: 1902 the value especially of shares of stock of a corporation liquidating its assets …   New Collegiate Dictionary

  • Breakup value — See: private market value. Bloomberg Financial Dictionary …   Financial and business terms

  • Breakup Fee — A common fee used in takeover agreements if the seller backs out of a deal to sell to the purchaser. A breakup fee, or termination fee, is required to compensate the prospective purchaser for the time and resources used to facilitate the deal.… …   Investment dictionary

  • going concern value — /ˌgəυɪŋ kən sɜ:n ˌvælju:/ noun the value of a corporation as it continues trading (in effect, the goodwill) as opposed to its breakup value …   Dictionary of banking and finance

  • частная рыночная стоимость — Совокупная рыночная стоимость компании в том случае, если бы каждая из ее составных частей действовала независимо и имела свою собственную цену акции. Также наз. breakup value (стоимость в случае разделения компании) или takeover value (стоимость …   Финансово-инвестиционный толковый словарь

  • Business and Industry Review — ▪ 1999 Introduction Overview        Annual Average Rates of Growth of Manufacturing Output, 1980 97, Table Pattern of Output, 1994 97, Table Index Numbers of Production, Employment, and Productivity in Manufacturing Industries, Table (For Annual… …   Universalium

  • United States — a republic in the N Western Hemisphere comprising 48 conterminous states, the District of Columbia, and Alaska in North America, and Hawaii in the N Pacific. 267,954,767; conterminous United States, 3,022,387 sq. mi. (7,827,982 sq. km); with… …   Universalium

  • Computers and Information Systems — ▪ 2009 Introduction Smartphone: The New Computer.       The market for the smartphone in reality a handheld computer for Web browsing, e mail, music, and video that was integrated with a cellular telephone continued to grow in 2008. According to… …   Universalium

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”