Asset stripping

Asset stripping,

Definition of Asset stripping:

  1. The result of asset stripping is often a dividend payment for investors and either a less-viable company or bankruptcy.

  2. Asset stripping is the process of buying an undervalued company with the intent of selling off its assets to generate a profit for shareholders. The individual assets of the company, such as its equipment, real estate, brands, or intellectual property, may be more valuable than the company as a whole due to such factors as poor management or poor economic conditions.

  3. Occurs when an acquirer of a business proceeds quickly to sell off its assets to recover the sum paid in acquiring the business.

  4. The practice of taking over a company in financial difficulties and selling each of its assets separately at a profit without regard for the companys future.

How to use Asset stripping in a sentence?

  1. Asset stripping is when a company or investor buys a company with the goal of selling off its assets to make a profit.
  2. Recapitalization refers to the process where asset-stripped companies take on new debt often through the use of leveraged loans.
  3. When working on controversial buy-outs, they have been accused of asset stripping and looking to make a fast buck without caring about the future of employees.
  4. Asset stripping often yields a dividend payment for shareholders while simultaneously resulting in a less-viable company.

Meaning of Asset stripping & Asset stripping Definition