I'm new to this forum, so please excuse if my formatting or something is wrong.
Anyways, I had a question regarding stocks. The particular question is regarding PWT.TO; Penn West Petroleum Ltd. on the tsx. It seems weird that today and lately, this stock has been trading at less than 25% of it's book value? How does that make sense?
If I am right, 'book value per share' is the company's (assets - liabilities)/# of shares. so if the price of this share is ~$2.60, how in the world is the book value '~$11.22'. Theoretically, couldn't someone just buy 51% of the company, and immediately liquidate the company to make 400% returns as the stock price is 25% of the book value? Is there some other debt or something that isnt taken into account into book value?
Also why wouldn't people go onto this stock like crazy, since its below its book value so much? There seems to be little risk in investing something thats worth x4 the money you put in.