Definition of conglomerate discount
The shares of conglomerates often trade at a discount to the combined value of the portfolio companies - ie at a discount. This discount is said to reflect a number of factors, including the cost of realising the value by selling portfolio companies, the on-going cost of the management team and negative sentiment towards conglomerates generally. Many investors believe that they can diversify their portfolios themselves and don't need management to do it for them.
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