The company stops operating, sells what it owns, pays its debts and distributes the remainder to shareholders in one or several payments. It is one of the few situations where the final value is an arithmetic exercise, not an opinion.
The return is the sum of liquidation payments minus today's price, net of time and costs.
Live deals are shown with your account, according to your plan.
The mechanics, step by step.
Step 1
Shareholders approve the wind-down and an estimated distribution range is published.
Step 2
Assets are sold and debts and contingencies settled.
A company in liquidation trades at €8.00. After selling its assets and paying its debts, it expects to distribute €10.00 a share in about 18 months.
The return depends on how much is paid out and when: every quarter of delay lowers the annual return.
Hypothetical figures to explain the mechanics. Not a real case and not a recommendation.
Step 3
Liquidating distributions are paid, usually staged over time.
Step 4
Your return is the sum of those payments minus what you pay today.