Why would selling off some stores improve a company's value?
Two different takes on an answer; the net-loss concept you mentioned and a core-business concept. If a store is actually a net-loss, and anybody is willing to buy it, it may well make sense to sell it.  Depending on your capital value invested, and how much it would take you to make it profitable, it may be a sound business decision to sell the asset.  The buyer of the asset is of course expecting for some reason to make it not a net loss for them (perhaps they have other stores in the vicinity and can then share staff or stock somehow). The core-business is a fuzzier concept.  Investors seem to go in cycles, like can like well-diversified companies that are resilient to a market downturn in one sector, but then they also like so-called pure-play companies, where you are clear on what you are owning.  To try an example (which is likely not the case here), lets say that Sunoco in 5% of its stores had migrated away from a gas-station model to a one-stop-gas-and-repairs model. Therefore they had to have service bays, parts, and trained staff at those locations.  These things are expensive, and could be seen as not their area of expertise (selling gas). So as an investor, if I want to own gas stations, I don't want to own a full service garage, so perhaps I invest in somebody else. Once they sell off their non-core assets, they free up capital to do what they know best. It is at least one possible explanation. "I'd like to modify the ""loss"" idea that's been mentioned in the other two answers.  I don't think a retail location needs to be losing money to be a candidate for sale.  Even if a retail location is not operating at a loss, there may be incentive to sell it off to free up cash for a better-performing line of business. Many large companies have multiple lines of business.  I imagine Sunoco makes money a few ways including: refining the gas and other petroleum products, selling those petroleum products, selling gas wholesale to franchised outlets or other large buyers, licensing their brand to franchised outlets, selling gas and convenience items direct to consumers through its own corporate-owned retail outlets, etc. If a company with multiple lines of business sees a better return on investment in certain businesses, it may make sense to sell off assets in an under-performing business in order to free up the capital tied up by that business, and invest the freed-up capital in another business likely to perform better. So, even ""money making"" assets are sometimes undesirable relative to other, better performing assets. Another case in which it makes sense to sell an asset that is profitable is when the market is over-valuing it.  Sell it dear, and buy it back cheap later." Maybe the location isn't yet, but will soon become a new loss.  For example older soon out of warranty equipment, new tax laws in the locality soon to take affect or even just declining sales over the past periods of measurement. Perhaps labor disputes or other locality issues make running the store difficult.   There is the possibility that the land the location occupies is worth more sold to the new big box retailer than it will be in the next 10 years of operation. In some cases, companies want to have a ton of cash on hand, or would sell assets to pay off debt.
"These are meaningless statistics on multiple levels:  1. These value rises are as of 2016. This does not indicate any sort of significant trend in the rise in value of these bags over time. Did they lose 30% in 2015? Will value stagnate in 2018?  2. Even if a trend were established (it is not), it doesn't suggest any sort of future movements whatsoever, as past price movements don't ensure future movements.  3. The fundamental idea of ""investing"" in an accessory is questionable at best. While collectors will buy things like cars and art, and some will sit on them as stores of value, the economics of generating future returns on these items is not so logically sound as with stocks or bonds. These collectors items do not generate future value in a way that produces cash flows. An individual has to purely hope that somebody is willing to pay more for it in the future; the item does not fundamentally necessitate higher payment. This is the fundamental problem also with ""investing"" in commodities, and why a fundamentalist like Buffet would never do it. You bet on a commodity move (hopefully with information that you believe the market to be incorrectly synthesizing); you don't really ""invest"" in one. What makes a stock or bond (a company) different is that a company can be thought of as a black box that prints more money than it is fed. We feed money into a company as investors; the company uses that money to buy assets (e.g. Machines, inventory) at book value; the assets are made to work in tandem to produce goods/services that have more value than the sum of their parts; those goods/services are sold at the now higher value for a profit, and cash flows are returned to investors for an annual return on your investment (sometimes dividends aren't paid, but are reinvested with the expectation that reinvestment will lead to far larger dividends in the future). As such, the money investors feed into a company is turned into more money at the other end, and thus the company has produced more value than it's inputs alone. It has done so through the combination of resources (assets) in a way that makes their value greater than the sum of their parts. A company fundamentally is a logical investment (barring doubts about management's ability to create this value). It is like a black box that prints more money over time than you feed it. Purses do not; gold does not; oil does not.  Don't invest in purses. Collect then if you love them, but don't bank on a payday." Even selling isn't riskless. Sure, your house has gained value-- but unless that's due to improvements you made to it, every other house in the neighborhood you might buy has gained value too, so moving might not result in extracting any net value. This is one of the reasons I keep reminding folks that a house is not an investment. It can be a business, if you're renting it out. But if you're occupying it, it is simply housing. If you are lucky you'll make a profit if and when you sell it, but don't count on that.  It does store value, but except for taking loans against that it's had to access that value. And lower loan rates than you'd otherwise pay are not a huge value when you'd save more if you don't borrow at all. The only use I'm making of my house's value is that by taking a very-low-rate mortgage when I could have paid cash I was able to leave more money in my investments -- arguably the safest leveraged investment possible. "In addition to Alex B's excellent overview, I'd like to add a few more bits of advice. First of all, one term you should know is ""commercial real estate"" - which is precisely what this is. There is a business element, but it is strictly (and almost entirely) intertwined to the underlying real estate, which makes this a special category of business which is generally considered simply ""commercial real estate"" (just like office buildings, shopping malls, etc). All real estate and businesses value are based on alternatives - what other options are there? In appraisal, these are generally called ""comparables"". A professional appraiser is generally available for commercial real estate of this type. While a full, official commercial appraisal can run into the thousands, many/most (all?) appraisers are willing to sell you a simplified version of their service, which can be called a ""letter of opinion"" and can help you get an idea for the market price (what other similar commercial properties are running for). A loan company would strictly require this, but if you are thinking of an all cash or form of seller-financing this would technically be optional. Your best bet is to read about some of what is involved in commercial real estate appraisal and evaluation, and you may even want to speak with commercial loan officers - even if you don't know that you want to get a loan to acquire the property! It's their job to help inform you about what is required and what they look for, so they can be a potential resource beyond your own research as well. With this said, the only way to estimate value (and, conveniently, the best way) is to look at other properties! And by ""others"", I mean that you should really not consider buying absolutely anything until you've viewed at least 6-10 other options in some depth - and you probably want to double or triple that number if you are looking to make this the last big business transaction of your life. If you don't you'll be relying on little more than dumb luck to carry you through - which in this area of business, you don't want to do because the dollar amounts and liabilities involved can bankrupt you in no time flat. With that general advice out of the way, here's a tiny nutshell version of valuation of commercial real estate. There are a few key parts involved in commercial real estate: land, improvements (buildings, docks, stuff like that), income, and wages.  Land: the value of the land is based upon what you could sell it for, as-is. That is to say - who else might want it? This alone has many important factors, such as zoning laws, the neighborhood (including your neighbors), water/utilities, pacts on the land (someone may have insisted the land not be paved into a parking lot, or really anything like that), alternative uses (could you put a golf course on it, or is the land suitable for a big building or farming?), etc. And is this in a growing area, where you might hope the value will increase over the next decade, or decrease, or basically stay flat (and possibly cause losses compared to inflation)? Improvements: anything on the land is both an asset and a liability. It's an asset because it could add to the value of the land, but it might also reduce the land value if it interferes with alternate land uses. It's a liability, both in the legal sense and in that it requires maintenance. If you want to rent them out, especially, that means concern about any foundations involved, termites, roofs, sewage/septic tanks, utilities that are your responsibility (pipes, poles, wires), as well as any sort of ac/heating you may have, docks, and so on. These things are rarely free and absolutely can eat you alive. Income: Ah, the best part, the constant influx of cash! But wait, is it a constant influx? Some businesses are purely seasonal (summer only, winter only), some are year-round but have peak times, and others don't really have a ""peak"" to speak of. If you are renting, are there issues collecting, or with people over-staying? How about damage, making a mess, getting rowdy and disturbing others? Regardless, there is obviously some income, and this is usually the most dangerous part of the equation. I say ""dangerous"", because people absolutely lie like dogs on this part, all the time. It's easy to cook the books, assuming they even attempt to keep proper books in the first place! Businesses of this form often have a lot of cash business that's easy to hide (from Uncle Sam, or sometimes even the owners themselves if there are employees involved) - and fake! And some people are just shoddy bookkeepers and the info is just wrong. But, there will clearly be some kind of yearly income involved. What does this matter? Well...how much is there? How much is tied to the owners (personal friends do business and they will leave if the ownership/management changes)? In commercial real estate the income will be calculated for a fiscal year, and then there is something called a ""multiple"", which is market dependent. Let's say the whole place takes in $100k in rent a year. As part of buying this business, you are buying not just assets, but expected future income. In some commercial areas the multiple is as little as .5 to 2 - which means that the going rate is about 6-24 months worth of income, as part of the purchase price. So with 100k rent a year, that means 50k-200k of the purchase price is attributable to the income of the business. And if business is half of what you thought it would be? That means the net value of the whole enterprise decreases by 25k-100k - on top of the reduced income every year you own it! Income provides cash flow, which should pay all the expenses (cleaning up from wind storms, replacing windows that are broken, hauling off trash, replacing a well that ran dry), and then the extra that remains is positive cash flow. If you take out a loan, then ideally the cash flow would also pay that completely so long as you don't have any big unexpected expenses in the year - and still have some left over for yourself. Wages: Well, that money doesn't collect itself! There's sales, keeping the books, collecting the rent, performing maintenance, customer service, cleaning, paying the bills, keeping the insurance people happy, handling emergencies, and everything else involved with running the business. Someone is going to do it, and the biggest error people make here is not to put any value on their time - and to make it so they can never afford to take a vacation again! Pay yourself, and give yourself the flexibility to pay others when you can't (or don't want) to do it all yourselves. So, what's the point of all this? How do you actually make any money? In two ways: 1) selling the whole thing later, and 2) cash flow. For 1, it's important that you not be in a situation where you are betting that in the future there will be a ""person richer, and dumber, than I am now"". If the current owner wanted 2 million, then 1 mil, then less, over multiple years...this suggests either he is delusional about the value of his place (and most property owners are), or that its actually hard to find a buyer for such a business. You are going to want to make sure you understand why that is, because most of the value of real estate is...well, in the real estate itself! For 2, you need cash coming in that's considerably more than the cost of running the place. Also, cash flow can strongly change the value of the business for resale (depending on the multiple, this can make a huge difference or prevent you from selling the thing at all).  You mentioned you want to put in more cabins, more marketing/sales efforts, etc. That's great, but first, that would mean added investment beyond the purchase price. Is it legally and physically practical to add more cabins, and what is their current utilization rate? If they are only renting 10% of their current capacity, increasing capacity may be premature. This will also vary through the year, so you may find there is a problem with being sold out sometimes...but only for a small percentage of the time. Which means you'll be adding buildings only to have them used for a fraction of the year, which will be very hard to make a profit from. If cash flow is good, ideally even being enough to cover a loan payment to help cover the purchase price (and remember that commercial real estate loans are much smaller loan-to-value ratios than in residential real estate), there is one final barrier to making money: the damn non-regular maintenance! Roofs, wells, and wooden walls all have a sad tendency to cost you nothing right up until the point they cost you $30k+ on a single day. Is there enough cash flow to make these sort of certainties (and if you plan to be there for years, they are a certainty) not put you in the poor house? This was rather long, but I hope this overview helps you appreciate all that you'll need to look into and be cautious of during your future en-devour! Commercial real estate is generally costly and high-risk, but also can be high reward. You'll need to compare many opportunities before you can get a ""feel"" for what is a good deal and what is a terrible one. You'll need to consider many factors, such as resale value and cash flow/income (which they will have to tell you and you can assume is not true, due to ignorance or malice), as well as maintenance and liabilities, before you can begin to really estimate the value of an enterprise of this sort. There are people who can help you, like appraisers and commercial brokers, but ultimately you'll need to do a lot of research and comparisons yourself to help you make a good decision.  Finally, there is no very simple method for evaluating commercial real estate value. You need a variety of information, and you must be skeptical of what you are told because of the very large sums of money involved. It is doable (lots of people do it), but you must take care and do your due diligence so you don't get bankrupted by a single bad purchase." This is what everyone said about music circa 1999, that the record labels would never agree to sell their songs online because it would devalue selling albums, and a bunch of archaic thinking etc... and then the iTunes store showed the industry a better way to distribute their content, conviced the labels to play along, and Apple is now the most profitable company in the world.   There's no reason this can't happen for TV, it's clearly heading there and the first person to do for TV what Apple did for music will make a fortune, hell it might even be Apple that does it, yet another reason why Apple stock is severly undervalued right now It may have some value!  Investopedia has a well-written quick article on how stock holders may still get some portion of the liquidated assets.  While there is generally little left for common shareholders if the price of those shares is tiny and some money does come back to shareholders there can still be significant profit to be made. As to why the trading volume is so high... there are many firms and hedge funds that specialize in calculating the value of and buying distressed debt and stock.  They often compete with each other to by the stock/debt that common shareholders are trying to get rid of.  In this particular case, there is a lot of popular interest, intellectual property at stake and pending lawsuits that probably boosts volume. It basically only affects the company's dealings with its own stock, not with operational concerns.  If the company were to offer more stock for sale, it would get less cash.  If it had a stock buy-back program, it could buy more shares for the same money.  If it was to offer to acquire another company in exchange for its own stock, the terms would be less attractive to the other company's owners.  Employee stock remuneration, stock options, and so forth would be affected, so there might be considerations and tax consequences for the company. The reason a company creates more stock is to generate more capital so that this can be utilized and more returns can be generated. It is commonly done as a follow on public offer. Typically the funds are used to retire high cost debts and fund future expansion. What stops the company from doing it?   Are Small investors cheated?   It's like you have joined a car pool with 4 people and you are beliving that you own 1/4th of the total seats ... so when most of them decide that we would be better of using Minivan with 4 more persons, you cannot complain that you now only own 1/8 of the total seats. Even before you were having just one seat, and even after you just have one seat ... overall it maybe better as the ride would be good ... :) Before the financial crisis it was all the rage with Sears being another controversial one. Sears Canada shareholders were upset that that company sold off all of its flagship stores and then distributed the cash via dividends to shareholders (in particular Lampert). Unsurprisingly with no reinvestment in the business, they declared bankruptcy recently. The US Sears is going through this selling stores to a separate real estate holding company.