Dead Cat Bounce: What Sellers Should Know Before an Exit
One concept that often appears in financial markets, but rarely gets discussed in private M&A, is the dead cat bounce.
If you are preparing to sell your company, understanding buyer psychology can be just as important as understanding your financial statements.
In public markets, a dead cat bounce refers to a temporary recovery in price after a significant decline, followed by a continuation of the downward trend.
In other words, the asset briefly looks healthy again before falling further.
In the context of selling a business, the same pattern can appear in revenue, profitability, or overall performance.
And if you misinterpret it, you can lose millions in exit value.
At Elkridge Advisors, we often see founders mistake a temporary improvement for a structural turnaround. Buyers, however, analyze these situations very differently.
Understanding the difference between a real recovery and a dead cat bounce can dramatically influence the timing, valuation, and structure of your exit.
Production Possibilities Curve and What It Reveals About Your Exit Value
If you are planning to sell your business, buyers are not just looking at revenue and profit.
They are trying to understand how efficiently your company turns limited resources into maximum output.
This is where the production possibilities curve becomes surprisingly powerful.
While it comes from economics, it maps perfectly onto how buyers think about value, scalability, and future upside.
At Elkridge Advisors, we often use this concept to help sellers reframe their business story in a way buyers instantly understand.
If you want buyers to see efficiency and upside instead of limits, reach out to Elkridge Advisors for a seller readiness review.
