In the news recently, has been coverage of activist investors trying to unlock value in companies. Carl Icahn has been said to think Ebay should unlock the value of PayPal the payments business it owns, and give that value back to shareholders. In the UK press there are similar articles about UK Supermarkets who have locked up value on the balance sheet from their property portfolios, and there is the case to try and unlock this value.

Morrison’s [http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?csi=10248] has a share price of about £2.45 a share, and its market capitalisation is about £5.728 Billion.

The actually value of all the supermarket land it owns is about £10 Billion.

This means the shareprice of Morrison’s does not reflect the true value of the business. Or another way of looking at it, is that perhaps one can buy shares in Morrison’s, spend £5.70 and get an asset worth £10, potentially.

Lots of ways to cut this cake, perhaps a more simple way to explain the share price of Morrison’s is that the share price of about £2.45 is about 57% of the total assets (inventory, business brand, customer base, property etc etc) that it owns. By following this argument, then the share price of £2.45 is only reflecting 57% of the true value of the company, and then perhaps the share price should be higher than market quoted price of £2.45 and be actually £4.30.

Or perhaps it is easier to simply state that markets are irrational.