XRX book value was in the $3 range before the Mulcahy turnaround. That was SO long ago it seems, and sold quite close to that before “popping” back based on actual technical fundamentals. However that was before 2 activities that affect BVPS (book value per share) - asset sell offs, and share repurchase - took off under Mr Activist. How accurate is this thinking: XRX BVPS based on current balance sheet and SEC information is under $1? That’s one dollar. If accurate, it’s not exactly a value play.
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Wall Street analysts know the book numbers inside and out. Their Bloomberg terminals actually have every financial ratio known to man already calculated for them. And the ones that actually follow the stock full time for their clients know the print industry trends just as well.
Wall Street knows what a dog the company is. But they were betting Icahn would come in and strip out the good pieces, sell them off at a profit, then load up the remaining shell of a company with debt and have it buy a competitor, which would drive up the stock price even more.
Wall Street has been treating the stock as a "trade", not an investment. They have a 12-24 month time horizon to get in, get the dividend payout in addition to appreciation of the stock price, then sell. They know the company is c-ap, but stocks for c-ap companies go up all the time for short periods.
Now Icahn is in a real bind. Time is running out, and the HP purchase isn't going to happen now that they adopted the "shareholder rights" agreement (aka, poison pill). So plan B is to have HP purchase some or all of Xerox and hope he can get his $40/share that way. Some would say that's actually been the real plan all along and the "we will buy HP" was just a smokescreen.
The "trade" is getting long in the tooth now though, so something needs to happen to prop the price up or hedge funds and financial institutions will start to cash out, driving the price down even more.
Surprising this thread hasn’t gotten traction. The reality is shocking. Wall Street doesn’t follow the thelayoff.com tho.
Information is accurate but misleading. Book value is roughly $0.03 - stating $1.00 misrepresents quite a bit.
This really illuminates how share repurchases have had a trivial affect on book, but that the ongoing asset liquidation has had a significant effect. Aside from the upstate NY manufacturing facility campus I am unaware of how many assets remain under consideration.
“Tech firms” argue that mind-capital is not part of book valuation and this is true. However labeling XRX as a “tech firm” for this purpose is laughable.
Well is you divide balance sheet assets by outstanding shares and round up, $1 is reasonable. But not sure if “assets” or “shares” have some footnote definitions for BVPS. Think OP is asking a question I can’t answer.