Elephant Talk Communications (ETAK) Provides Update to Shareholders on ValidSoft Divestiture
Divestitures are a way for a company to manage its portfolio of assets. As companies grow, they may find they are trying to focus on too many lines of business and that they must close some operational business units in order to focus on more profitable lines. This is a problem that conglomerates may face. Companies may also sell off business lines if they are under financial duress. For example, an automobile manufacturer that sees a significant and prolonged drop in competitiveness may sell off its financing division in order to pay for the development of a new line of…