Strategies & Market Trends : Value Investing

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To: Investor2 who wrote (59875)10/6/2017 1:08:26 PM
From: Lazarus   of 61088
I can tell you what I was told by another investor who screens hundreds of small regional banks (and invests in several)

We were discussing the fact that a small regional bank that I purchased agreed to a buyout BELOW the trading price of the stock. I believe it sold at book value.

I quote him:

Market value and book value are two different animals.

D & O of either the selling or the buying institution can at a minimum be heavily fined or at a maximum pay steep penalties and do jail time if the transaction varies too much from book value.

Small banks today on average are acquired for between 1 X BV ~ 1.7 X BV. Anything outside of that higher or lower will land D & O in hot water.

Hope that helps some... it sure helped me.
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