It’s funny as we can see from our valuation estimates that Kraft itself has undervalued its price.
Nevertheless, its rejection of Philip Morris’ offer of $90 per share and the simultaneous plan of restructuring, suggests the long term value strategy.
As Mr. Richman once points out, their long term strategy has been working, but frustratingly the stock market has been undervaluing companies like Kraft, who sacrifice short-term profit in order to invest in long term growth.