[code4tee]

1) The assets are not liquid.

2) Because the assets are not liquid the “value” of the assets is highly debatable. (Value of your stock portfolio vs private equity holdings).

3) Some assets are not free to own. Simple example being property. It’s worth a lot but also costs a lot (taxes, Maint, ...) to own it. This is in theory valued into the asset value but really on a point in time basis. If the asset isn’t “productive” in earning income then having it on your books with those expenses just keeps eating away at funds elsewhere. Think owning a paid off rental property that doesn’t earn enough to cover its annual costs. Worth a lot in a fire sale, but terrible item to have on the books long term.

4) Companies can have negative goodwill on their balance sheet, especially if there are questions about the quality of the fundamental business or management team. Outsiders may say the company owns a lot of stuff but it’s so poorly managed that that that stuff isn’t worth what it’s normally worth. Yahoo had this issue where the market cap of the company was less than the stock Yahoo owned in other companies. “Yahoo the company” and its team was literally considered to be worth negative dollars.

[whatok]

Liquidity doesn't begin to explain the valuation question. SoftBank's market cap was once 110bn vs their stake in Ali Baba at 150bn [0] . Even if you marked all the Vision Fund nonsense to 0, SoftBank is still a real company that does stuff outside of being a bad PE/VC/HF firm.

[0] https://www.reuters.com/article/us-softbank-group-alibaba/a-...

[reducesuffering]

I think the market was factoring in SoftBank's 160B of debt. Even if their Alibaba stake is 150b, if it's tied to the company holding 160B in debt, it's actually only offsetting a huge debt load...

I.e. I can incorporate a company, borrow 100m, and buy 100m of Alibaba. It doesn't mean my company is worth anywhere close to 100m...

[treis]

>Companies can have negative goodwill on their balance sheet, especially if there are questions about the quality of the fundamental business or management team

That's not what goodwill is. Goodwill is the difference between book value and purchase price of assets to make the numbers work. It's nothing to do with the quality of the business or management team.