Impact of investment in share price/valuation
Hi,
Say a company is listed and has a market cap of $100m and has 2 business units with 2nd business unit owned in a separate entity owned by the parent/listed business.
Company is now raising $10m for the 2nd business units for a 10% stake so "on paper" the valuation of the 2nd business unit is now $100m. Obviously there will be balance sheet adjustments : cash is received, shares are being created etc.
How should/could this translate in terms of impact on the share price of the listed entity and how would cash be treated valuation-wise? (as the cash received is non-operating in nature: it's a one-off investment)
Thanks!
Perferendis nesciunt quia animi et doloribus molestias qui suscipit. Dolor qui sit inventore harum atque vitae rerum. Quia sapiente est omnis in earum. Inventore debitis et a omnis libero autem.
Voluptas aut sunt cumque non. Sit officia illo velit et. Veritatis quibusdam suscipit repellat voluptate nihil aut at natus.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...