Quick Post: Two Net-Nets* With Operating Assets

Both situations do not screen as net-nets currently, but if you allow for my accounting treatment, you get paid for the operating business that's left

This is a shorter post, on two companies in different industries (chemicals, media) on different continents (Europe & North America, North America only) that trade with a negative Enterprise Value (if you allow for my treatment of accounting):

• The first company, a European multi-billion company

  • has deals in place that are due to be completed within the next months

    • my “accounting treatment” is to expect the deals to complete as anticipated

  • after repayment of debt, the company will return significant funds to shareholders

  • the company will remain with a set of operating assets that should earn a couple of hundrend million in EBITDA through the cycle, i.e. have value themselves

• The second company, a Canadian Microcap

  • has disposed of an asset and recorded the cash,

    • my “accounting treatment” is the debt on balance sheet is backed by tax receivables. if you allow that treatment (or recognize the tax receivables as cash), the company is a net-net

  • they indicated they are assessing ways to maximize shareholder value, unclear as what these will be, several options being discussed

I won’t repeat here all details of the businesses as there are write-ups and posts on the internet. I focus on summarizing the information conscisely.