What Is Asset Stripping?
A much more aggressive form of value investing is called asset stripping. Generally, the value investor is a long-term participant who has spotted underpriced assets. This investor may need to wait some time before the market agrees and prices the company at a highr level. However, there are bigger players in this game too. They are management teams of hedge funds, vulture funds, special situations funds and more. These managers will purchase large blocks of company stock and then use the influence that buys to pressure company management. Click here to visit our stock market investment blog The pressure that they apply will be aimed at changing the direction or strategy being taken by the firm. This will often involve hard decisions that usually lead to parts of the company being sold. By selling some parts of a business, corporate debts can be lowered or loss making subsidiaries jettisoned to leave a healthier and more profitable firm. This will help the market price rise and investo
