Liquidations and wind-downs

Sketch notes on an article by Wexboy.

Liquidations

top of heap for catalysts. usually announced after the company has sold majority of assets. final asset value usually highly certain. timeframe 6m – 2 yrs. directors likely to be conservative, so any surprises in asset value should be to upside. very attractive IRRs.

liquidation stocks normally delist – not a problem if your analysis is correct

Negatives: wide spread/high offer price will reduce return.

plug "liquidate" or "liquidation" into Investegate.

Wind-downs

an extended form of liquidation. majority of assets still not sold. timeframe 1 yr -3 yrs. expect asset values to change radically over time – usually downwards

distribution method

look for the words "capital return" or "return of capital", rather than "dividend", "distribution" or "special dividend". the former is subject to CGT – which is better – whilst the latter to income tax.

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About mcturra2000

Computer programmer living in Scotland.
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