Corporate breakups are costly, distracting and short on concrete business benefits. So why do investors and analysts keep pushing for them? Picture yourself fidgeting as a company presentation proceeds through weak results in countless countries, or twice switches gear to unpack three entirely unrelated businesses. You too would be praying for a big chunk of the company to just go away.

A breakup creeps onto the agenda when companies with assets that don’t necessarily fit together are perceived to be trading too cheaply. Investment analysts value each unit as if it was a standalone entity, add everything up and emphasize that the total is significantly higher than the firm’s stock-market capitalization. The difference must be a yawning “conglomerate discount.”

QOSHE - Don’t Give Activists Cause to Dine on Your Breakup - Chris Hughes
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Don’t Give Activists Cause to Dine on Your Breakup

4 2
14.03.2024

Corporate breakups are costly, distracting and short on concrete business benefits. So why do investors and analysts keep pushing for them? Picture yourself fidgeting as a company presentation........

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