Definition of Asset stripping:
The result of asset stripping is often a dividend payment for investors and either a less-viable company or bankruptcy.
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.
Occurs when an acquirer of a business proceeds quickly to sell off its assets to recover the sum paid in acquiring the business.
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?
- Asset stripping is when a company or investor buys a company with the goal of selling off its assets to make a profit.
- Recapitalization refers to the process where asset-stripped companies take on new debt often through the use of leveraged loans.
- 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.
- Asset stripping often yields a dividend payment for shareholders while simultaneously resulting in a less-viable company.
Meaning of Asset stripping & Asset stripping Definition