Asset Stripping

Description of Asset Stripping. Explanation.

Definition Asset Stripping. Description.

Asset Stripping is a process whereby a company acquires a controlling interest in another company for the purpose of disposing of its assets.

It is buying an undervalued company and selling off some or all of its assets. A company's market value (the total worth of its shares) may have fallen, because of inefficient management or adverse markets, to a level below the total value of its individual assets, such as property, plant, patents or subsidiary activities. Assets stripping can make a quick profit for the company engaging in it but normally brings to an end the business of the company taken over.

Compare also: Liquidation Value  |  Restructuring  |  Turnaround Management

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End of description Asset Stripping. An explanation.