A recent article from Bloomberg states that Deutsche Bank's share price is less than half its theoretical liquidation value.
According to Investopedia, liquidation value is defined as:
The total worth of a company's physical assets when it goes out of business or if it were to go out of business.
This means, that the liquidation value does not include intellectual property, goodwill and brand recognition. Which would be reasonable factors why a share price can exceed the total worth of a company's physical assets.
Now, a company's total value, which includes intangible assets, is represented by the company's stock price.
Wouldn't this imply that:
- If one bought all shares of Deutsche Bank and sold all its physical assets could make a fortune? (assuming that such action would not affect the share price)
- If a company's total value is less than that of its physical assets, the company's intangible assets are negative?
So the question that I would have asked is: How is it possible, that the stock price of Deutsche Bank is less than half of the worth of its physical assets?