Timeline for How can a company trade at a market cap below its cash on hand?
Current License: CC BY-SA 4.0
10 events
| when toggle format | what | by | license | comment | |
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| Mar 19, 2020 at 20:06 | comment | added | chrylis -cautiouslyoptimistic- | @Grade'Eh'Bacon Fair enough, but I've been invested in this company since it was spun off 12 years ago. | |
| Mar 19, 2020 at 17:43 | comment | added | Grade 'Eh' Bacon | @chrylis-onstrike- Be careful - the listed figures are from the last completed fiscal period. If the economy suffers for an extended period of time, that could result in less consumer spending, which impacts future revenues of most companies. Prices may be artificially low, but you can't know that for sure just by checking the book assets of the company. For example - what if they just paid $10M for a new building that has dropped in value to $7M due to a recession? Their book value would be inflated by $3M. | |
| Mar 19, 2020 at 3:00 | comment | added | chrylis -cautiouslyoptimistic- | A company I'm invested in is currently trading at 0.7 of book, and unless I'm much more of an idiot than I realize it's simply because of mass panic and reflexive sell-offs. I'm buying. | |
| Mar 19, 2020 at 1:47 | comment | added | alephzero | @Zonko The financial results only tell you what had already happened. Looking at the company's own future forecasts, and the increasing regulation in its industry sector, might explain why after trading at around $20 for most of a year (with a short blip up to $27) the share price has steadily dropped to around $7 over the last few months. | |
| Mar 19, 2020 at 1:34 | comment | added | mbrig | @Zonko you can see the balance sheet here: finance.yahoo.com/quote/CRTO/balance-sheet?p=CRTO Total assets: 1.79B Total liabilities: 752M. Interestingly the difference is still greater than the market cap. Its possible some of the "non-current" or intangible assets are being priced by the market as uncollectable/not correctly valued... | |
| Mar 18, 2020 at 15:14 | comment | added | Grade 'Eh' Bacon | @Zonko Your link returned no results to me, and I didn't investigate further. Consider that 'debt' can look like many things on the financial statements, and I mean anything on the 'liabilities' side of the balance sheet. ie: this would include Accounts payable, etc. | |
| Mar 18, 2020 at 14:59 | comment | added | Zonko | in the link posted in the question, if you go to the "financials" tab you have a summary of the last earnings, showing among other things the cash on hand. | |
| Mar 18, 2020 at 14:55 | comment | added | Grade 'Eh' Bacon | @Zonko 'Cash on hand' is the literal cash in the bank. Just like you can have $5k in your savings account and a $200k mortgage, a company can have $100M cash on hand but $1B in debt. I am not sure what summary you are looking at, but there could be other things going on. This would be a common example. | |
| Mar 18, 2020 at 14:53 | comment | added | Zonko | Wouldn't this be reflected in the financial results ? Maybe I'm wrong in my understanding that "cash on hand" is the net value, but I see no mention of debts in the summary... | |
| Mar 18, 2020 at 14:44 | history | answered | Grade 'Eh' Bacon | CC BY-SA 4.0 |