NJ5 on 05 August 2008
| Pristine20 said: Thats strange. So HSBC is basically devalued and currently can be sold for much cheaper than it's worth?
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As I said before, the company's worth is not the assets value. It's Assets minus Liabilities.
If you have a $500k house that you have a $400k unpaid loan on, the current worth of the house+loan is $500 - $400k = $100k. No one will pay you $500k for it, unless you get rid of the loan yourself.
When you buy a company, you also buy their debts, etc. Not just their assets. Since you're buying "debt", this decreases the amount you have to pay (i.e. debt has a negative worth).
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