Given that the company headquarters is said to be worth about $1.2
billion, that gives the BS [Bear Stearns] banking business a value of negative $1
billion.
That’s John Quiggin. As Matt Yglesias points out, maybe the building isn’t worth $1.2 billion any more but that isn’t reassuring economic news either.
Bear Stearns does not own the land (99-year lease) and has already sale-leasebacked the building.
This does not entirely negate the “negative enterprise value” thesis, but it does make it more complicated than “it’s worth $1.2 billion.”
The value of a business’ assets equals the value of its equity plus the value of its debt. It’s equity was bought for $200million, but it also has an enormous (!) amount of debt, implying a positive enterprise value.
Is it realistic?
Is it realistic?
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