Starwood Hotels & Resorts Worldwide, Inc.
Thesis
Starwood Hotels was up for sale with a break-up value estimated between $90 and $105. Despite the stock initially dropping to the $60s after the announcement, it rebounded to $75, indicating potential value in the acquisition process.
Did it work?
failed
confidence: high
The long thesis rested on a sale/break-up process delivering $90-$105 per share, with the stock at $75 as evidence the market was pricing in that outcome. Instead, the stock declined 94.5%, leaving it at a small fraction of the claimed break-up value — a decisive invalidation of the acquisition-value thesis regardless of how much time has elapsed. Such a collapse indicates the anticipated sale at premium valuation never materialized for holders of this position.