Several days ago, some were confused to read a Bloomberg article about Chinese cell phone maker HTC whose market cap dipped below its net cash (it has no debt), meaning one could buy its cash at a discount. Since then HTC's stock has continued sinking, and as of today, using CapIQ data, the company's cash of $1.7 billion, which the market is assigning value to as its only asset, was worth about 55% more than its entire market cap. This means that if one were to buy the company today, and liquidate it as it stood the same day, one would - at least on paper - buy the company's cash at a 36% discount and end up with an immediate cash profit of more than 50%.
Said otherwise, HTC now has a negative Total Enterprise Value (market cap plus debt less cash).
It isn't the only one: in this "baby with the bathwater" selling which we have seen in the past few weeks especially in EMs and China, various other such opportunities have presented themselves, and to assist readers who may be looking to buy cash at a discount of as much as 60%, we have compiled a list of some of the most prominent global companies with a negative TEV, and whose cash can be bought at a substantial discount to fair value: in some cases as much as 60%.
Of course, it goes without saying that if a company's cash is trading at 60% discount below fair value, there probably is a reason. So before anyone blindly rushes into these discounted opportunities, feel free to find out first just why the cash can be bought at 40 cents on the dollar...