It's just that in my book, value = what I get, not what I pay.
Since this metric include the market cap, a Chinese OTC shell company can have an 'enterprise value' of several hundreds millions, even though everybody knows it's worth nothing.
Maybe it's just me though - I like value investing.
Indeed, this happens often. Like buying a house under the financial crisis and taking out a loan on unreasonable valuations.
This is btw. exactly what the article talks about. You should use the most favorable way to finance your company: Stocks when the market thinks you are worth more than you think and bonds when you think you are worth more than the market thinks.
It's just that in my book, value = what I get, not what I pay.
Since this metric include the market cap, a Chinese OTC shell company can have an 'enterprise value' of several hundreds millions, even though everybody knows it's worth nothing.
Maybe it's just me though - I like value investing.