Company wants to sell all of its assets, worth more than share price?
Why is the stock trading at only $5 per share? The share price is the perceived value of the company by people buying and selling the stock. Not the actual value of the company and all its assets. Generally if the company is not doing well, there is a perceived risk that it will burn out the money fast. There is a difference between its signed conditional sale and will get money and has got money. So in short, it's trading at $5 a share because the market doesn't feel like it's worth $12 per share. Quite a few believe there could be issues faced; i.e. it may not make the $12, or there will be additional obligations, i.e. employees may demand more layoff compensation, etc. or the distribution may take few years due to regulatory and legal hurdles. The only problem is the stock exchange states if the company has no core business, the stock will be suspended soon (hopefully they can release the $12 per share first). What will happen if I hold shares in the company, the stock gets suspended, and its sitting on $12 per share? Can it still distribute it out? Every country and stock markets have laid out procedures for de-listing a company and closing a company. The company can give $10 as say dividends and remaining later; or as part of the closure process, the company will distribute the balance among shareholders. This would be a long drawn process. The stock exchange here serves as a meeting place for current shareholders who want to sell their shares to someone else. This has nothing to do with liquidation, which is a transaction between the company and its shareholders. A company does not have to be listed on an exchange to make distributions to shareholders.
"There obviously is not such a list of companies, because if there were the whole world would immediately invest in them. Their price would rise like a rocket and they would not be undervalued anymore. Some people think company A should be worth x per share, some people think it should be worth y. If the share price is currently higher than what someone thinks it should be, they sell it, and if it is lower than they think it should be they buy it. The grand effect of this all is that the current market price of the share is more or less the average of what all investors together think it should currently be worth. If you buy a single stock, hoping that it's undervalued and will rise, you may be right but you may equally well be wrong. It's smarter to diversify over lots of stocks to reduce the impact of this risk, it evens out.  There are ""analysts"" who try to make a guess of which stocks will do better, and they give paid advice or you can invest in their funds -- but they invariably do worse than the average of the market as a whole, over the long term. So the best advice for amateurs is to invest in index funds that cover a huge range of companies and try to keep their costs very low." Firstly it is completely legal for a company to buy its own shares, I don't believe it would be legal to do so secretly. It would also be very difficult to do that secretly.   So hypothetically we have a company Johnbbob Inc. It doesn't have any assets other than $100 in a bank account and there are 100 shares each owned by a different person. Each share would be worth $1. So the company decides to buy one share. Now there is $99 in the account and 99 shares, each share is still worth $1. So the company continues to buy shares until there is only one share left and $1 in the account. If the company buys that last share it will no longer have any assets and will cease to exist, effectively dissolving the company.  TL:DR it is called dissolving the company or dissolution and it happens fairly often with limited liability corporations. "Will the investment bank evaluate the worth of my company more than or less than 50 crs. Assuming the salvage value of the assets of 50 crs (meaning that's what you could sell them for to someone else), that would be the minimum value of your company (less any outstanding debts). There are many ways to calculate the ""value"" of a company, but the most common one is to look at the future potential for generating cash.   The underwriters will look at what your current cash flow projections are, and what they will be when you invest the proceeds from the public offering back into the company.  That will then be used to determine the total value of the company, and in turn the value of the portion that you are taking public. And what will be the owner’s share in the resulting public company? That's completely up to you.  You're essentially selling a part of the company in order to bring cash in, presumably to invest in assets that will generate more cash in the future.  If you want to keep complete control of the company, then you'll want to sell less than 50% of the company, otherwise you can sell as much or as little as you want." "A company's valuation includes its assets, in addition to projected earnings. Aside from the obvious issue that ""projected earnings"" can be wildly inaccurate or speculative (as in the case of startups and fast-moving industries like technology), a company's assets are not necessarily tied to the market the company is in. For the sake of illustration, say the government were to ban fast food tomorrow, and the market for that were to go all the way to zero.  McDonald's would still have almost 30 billion dollars worth of real estate holdings that would surely make the company worth something, even though it would have to stop selling its products. Similarly, Apple is sitting on approximately $200 billion dollars in cash and securities in overseas subsidiaries.  Even if they never make another cent selling iPhones and such, the company is still worth a lot because of those holdings. ""Corporate raiders"" back in the 70's and 80's made massive personal fortunes exploiting this disconnect in undervalued companies that had more assets than their market cap, by getting enough ownership to liquidate the company's assets.  Oliver Stone even made a movie about the phenomenon. So yes, it's certainly possible for a company to be worth more than the size of the market for its products." The people who cause this sort of sell-off immediately are mostly speculators, short-term day-traders and the like. They realize that, because of the lowered potential for earnings in the future, the companies in question won't be worth as much in the future. They will sell shares at the elevated price, including sometimes shares that they borrow for the explicit purpose of selling (short selling), until the share price is more reasonable. Now, the other question is why the companies in question won't sell for as much in the future: Even if every other company in the world looks less attractive all at once (global economic catastrophe etc) people have other options. They could just put the money in the bank, or in corporate bonds, or in mortgage bonds, or Treasury bonds, or some other low-risk instrument, or something crazy like gold. If the expected return on a stock doesn't justify the price, you're unlikely to find someone paying that price. So you don't actually need to have a huge sell-off to lower the price. You just need a sell-off that's big enough that you run out of people willing to pay elevated prices. I haven't seen any of the other answers address this point – shares are (a form of) ownership of a company and thus they are an entitlement to the proceeds of the company, including proceeds from liquidation. Imagine an (extreme, contrived) example whereby you own shares in a company that is explicitly intended to only exist for a finite and definite period, say to serve as the producers of a one-time event. Consider a possible sequence of major events in this company's life: So why would the shares of this hypothetical company be worth anything? Because the company itself is worth something, or rather the stuff that the company owns is worth something, even (or in my example, especially) in the event of its dissolution or liquidation. Besides just the stuff that a company owns, why else would owning a portion of a company be a good idea, i.e. why would I pay for such a privilege? Buying shares of a company is a good idea if you believe (and are correct) that a company will make larger profits or capture more value (e.g. buy and control more valuable stuff) than other people believe. If your beliefs don't significantly differ from others then (ideally) the price of the companies stock should reflect all of the future value that everyone expects it to have, tho that value is discounted based on time preference, i.e. how much more valuable a given amount of money or a given thing of value is today versus some time in the future. Some notes on time preference: But apart from whether you should buy shares in a specific company, owning shares can still be valuable. Not only are shares a claim on a company's current assets (in the event of liquidation) but they are also claims on all future assets of the company. So if a company is growing then the value of shares now should reflect the (discounted) future value of the company, not just the value of its assets today. If shares in a company pays dividends then the company gives you money for owning shares. You already understand why that's worth something. It's basically equivalent to an annuity, tho dividends are much more likely to stop or change whereas the whole point of an annuity is that it's a (sometimes) fixed amount paid at fixed intervals, i.e. reliable and dependable. As CQM points out in their answer, part of the value of stock shares, to those that own them, and especially to those considering buying them, is the expectation or belief that they can sell those shares for a greater price than what they paid for them – irrespective of the 'true value' of the stock shares. But even in a world where everyone (magically) had the same knowledge always, a significant component of a stock's value is independent of its value as a source of trading profit. As Jesse Barnum points out in their answer, part of the value of stocks that don't pay dividends relative to stocks that do is due to the (potential) differences in tax liabilities incurred between dividends and long-term capital gains. This however, is not the primary source of value of a stock share. I'm going to guess that you found this because of a stock screener.  This company went through a 1:20 reverse split on June 30, so every 20 shares outstanding became a single share.  Where before you had 20 shares worth $100 you now have 1 share worth $100, the value of the company doesn't change because of a split.  This company was never trading for $30+ per share.  Reverse splits are typical of a floundering company trading on an exchange that has a minimum share price requirement.  While reverse splits don't change the value of the company, just the number of shares outstanding and the price per share, no healthy company performs a reverse split.  Reverse splits are generally a massive signal to jump ship... The company seems to be trading for $1 right now, why the value fell from a pre-split $1.65 ($33/20) to $1 is anyone's guess; how the company ever got to $1.65 is also anyone's guess. But looking at the most recent 10-Q there are numerous causes for concern:  Note 2. Capital Stock On March 6, 2017, the Company issued as compensation for services provided a total of 650,000 common shares with a fair value of $390,000 to a third party. The fair value of the shares was based on the price quoted on the OTC pink sheets on the grant date. this indicates a share price of $0.60 ($390,000/650,000) as of 3/6/2017, just to reinforce that the google price chart doesn't show the true past but a past adjusted for the split Results of Operations The three months ended March 31, 2017 compared to the three months ended March 31, 2016 For the three months ended March 31, 2017 compared to the three months ended March 31, 2016, total revenues were $0 and $0, respectively, and net losses from operations were $414,663 and $26,260, respectively. The net losses were attributable to costs attributable to operating as a public company, in particular, common stock with a valuation of $390,000 that was issued to an investor relations firm in the first quarter of 2017. Going Concern As of March 31, 2017, there is substantial doubt regarding our ability to continue as a going concern as we have not generated sufficient cash flow to fund our proposed business. We have suffered recurring losses from operations since our inception. In addition, we have yet to generate an internal cash flow from our business operations or successfully raised the financing required to develop our proposed business. As a result of these and other factors, our independent auditor has expressed substantial doubt about our ability to continue as a going concern.    Liquidity and Capital Resources We had no cash as of the date of March 31, 2017. Additionally, since there is no balance sheet in the last 10-Q (another bad sign), the last annual report 10-K has this balance sheet: So the company: So why did the stock value plummet? It's anyones' guess but there is no shortage of ways to justify it.   In fact, it's reasonable to ask how is this company still worth $3mm ($1 * 3mm shares outstanding)... Remember that shares represent votes at the shareholders' meeting. If share price drops too far below the value of that percentage of the company, the company gets bought out and taken over. This tends to set a minimum share price derived from the company's current value. The share price may rise above that baseline if people expect it to be worth more in the future, or drop s bit below if people expect awful news. That's why investment is called speculation. If the price asked is too high to be justified by current guesses, nobody buys. That sets the upper limit at any given time. Since some of this is guesswork, the market is not completely rational. Prices can drop after good news if they'd been inflated by the expectation of better news, for example. In general, businesses which don't crash tend to grow.  Hence the market as a whole generally trends upward if viewed on a long timescale. But there's a lot of noise on that curve; short term or single stocks are much harder to predict.