<p>Here are some possible reasons
(A) book value is overvaluing the assets , so you can’t actually sell them for book.<br />
(B) the liquidation decision is being obstructed by management (because they would lose their jobs on a liquidation )
(C) the company performs a public service and is prevented by regulators from unwinding.</p>

CC BY-SA 4.0
2024-11-09T04:01:54.450Z
has there ever been a case where a company has done this?
JobHunter69
CC BY-SA 4.0
2024-11-10T21:51:42.993Z
According to ChatGPT , In early 2015, when RadioShack filed for bankruptcy under Chapter 11, its P/B ratio was already well below 1, indicating that the company's market value was less than its book value (i.e., investors thought the company’s assets were not worth the liabilities or were overvalued in the market).
dm63
CC BY-SA 4.0
2024-11-09T03:21:47.220Z
2024-11-09T03:21:47.220Z
dm63
<p>It would benefit the investors more immediately</p>

<finance>
Why doesn’t a company immediately liquidate if its p/b falls below 1?
JobHunter69
# Why doesn’t a company immediately liquidate if its p/b falls below 1?

(Asked by: username_0 on 2024-11-08)

It would benefit the investors more immediately

**Tags:** finance


---

## 1 answers

### Answer by username_1 on 2024-11-09. Score: 0

Here are some possible reasons
(A) book value is overvaluing the assets , so you can’t actually sell them for book.  
(B) the liquidation decision is being obstructed by management (because they would lose their jobs on a liquidation )
(C) the company performs a public service and is prevented by regulators from unwinding.

> **Comments:**
> **username_0**: has there ever been a case where a company has done this?  
> **username_1**: According to ChatGPT , In early 2015, when RadioShack filed for bankruptcy under Chapter 11, its P/B ratio was already well below 1, indicating that the company's market value was less than its book value (i.e., investors thought the company’s assets were not worth the liabilities or were overvalued in the market).  

---

