Liquidation Value in a market with no liquidity is nonsense. One cannot use early 1998 or late 1997 hotel valuation measures for a portfolio like Starwoods. The market is looking at the short term difficulty Starwood will have in less than 4 months of replacing or paying off Lehman Brothers and Bankers Trust $1.0 billion, one-year term loan (They have their own problems and do not want to roll this note) and paying off a $250 million forward. Selling assets to meet short term liabilities never brings in the best bids. And Starwood is not in as bad of shape as others who will be forced to sell in this same time period further depressing prices. In this market, bankers are forcing all sorts of players like Chastain and Criimi Mae to make ugly decisions. Until these short term funding issues are addressed I will wait it out.
This stock is extremly overvalued. In a recession who will stay at hotels. The first thing individuals do is stop vacationing. Business cut back travel. This stock could lose another 20% easily. Good luck.