> stocks have had price to book multiples less than one
It's not even that unusual, or newsworthy. It's pretty common for banks, basically the rule for European banks. I'm still not convinced the numbers are "real" though. As I understand it, there are a few main arguments as to why "buy and strip" price arbitrage doesnt happen, and I'm not sure which is/are true:
- Regulatory barriers. JPM or Apple can't just buy Deutsche Bank because lawmakers won't allow it.
- They're too big to be bought out out by (European?) private equity, or controlling stakes aren't available.
- That's not real book value. Try to wind it down and it'll evaporate.
Maybe there are more. I understand that dividends and buybacks are currently limited by regulators in Europe, and that closes one valve for the price arbitrage, but still...
It's not even that unusual, or newsworthy. It's pretty common for banks, basically the rule for European banks. I'm still not convinced the numbers are "real" though. As I understand it, there are a few main arguments as to why "buy and strip" price arbitrage doesnt happen, and I'm not sure which is/are true:
- Regulatory barriers. JPM or Apple can't just buy Deutsche Bank because lawmakers won't allow it.
- They're too big to be bought out out by (European?) private equity, or controlling stakes aren't available.
- That's not real book value. Try to wind it down and it'll evaporate.
Maybe there are more. I understand that dividends and buybacks are currently limited by regulators in Europe, and that closes one valve for the price arbitrage, but still...