It still holds, but it takes time for information to be priced in. Remember the insanity with pets.com, koop.com and the like not so long ago? We're seeing another "Emperor's New Clothes" situation today.
The market will price things appropriately in time but, as the saying goes, the market can stay irrational far longer than you can stay solvent.
If anything, this example clearly shows that 'Efficient Market Hypothesis' doesn't hold water. The economic 'science' establishment clings to it to the point of looking silly because they are ignorant of the latest research in dynamical / complex systems theory.
It's a useful hypothesis to use as an ideal, and just because reality is different from the preconditions of the hypothesis doesn't mean it's silly. Sort of like Newtonian physics.
Also, deviations from situations predicted by EMHhelp identify weaknesses or abnormalities in the real market.
Basically, the 'Efficient Market Hypothesis' and Newtonian physics are both wrong. Markets don't accurately price things to 1/100th of a percent every second thought the day. Stocks go up and down though random chance and bubbles are all too common. A more basic failing of the efficient market hypothesis is the lack of a standard level of risk tolerance. However, as a general rule it is vary hard to significantly beat the market over time and for most real world objects F = M * A.
That's basically why I called it "scary". It's amazing that there was 28 dollars/share worth of missing information in this situation. If that sort of oversight lapse is at all common, we're screwed worse than we can possibly imagine.
I wouldn't call it common, but huge companies make huge mistakes from time to time (recall Enron, Nortel, etc. just a few years ago) and the investors in those companies are the ones who pay the price. In this particular case the "missing information" is worse than you think: BSC shares were at ~$160 less than a year ago with much the same assets now being priced at only $2 per share.
Remember though, the assets haven't disappeared: They still exist and are producing wealth in the economy. None of the included properties are going to evaporate. As with Enron's meltdown, business continues as usual under new ownership, with the old owners now holding significantly lighter wallets.
My family had stock in Montana Power before the decided to become a Fiber company in 2001. the stock price was 70+ and 2 months later it was trading for cents.
