What is a knockdown price?
When assets are sold very cheaply, they're said to be traded at a knockdown price. This may be the case if they experience turbulence and fall in value. It can also be because a seller is keen to get a quick deal and willing to accept a low price.
Where have you heard about knockdown prices?
The term may be used when a listed company is facing a difficult time and the value of its shares tumbles. Investors might be willing to pay a knockdown price for these shares if they expect them to climb in value in the future. However, this isn't guaranteed.
What you need to know about knockdown prices.
Knockdown prices can apply to pretty much anything, from cars and houses through to goods being sold on the high street. They can be used to generate buyer interest when there would otherwise be little demand. For example, you might be willing to accept a knockdown price for your house if it had been on the market for a very long time.
In the world of mergers and acquisitions, entire companies can be offered at knockdown prices if they've underperformed.
Find out more about knockdown prices.
Knockdown prices may be offered when assets become illiquid and can only be sold at a discount.