Destruction of value

Destruction of value occurs when a company's resources, assets, or market position decline, leading to a decrease in its worth. This can happen through poor management, bad investments, operational failures, or external shocks like economic downturns or new competitors. Essentially, it means that the company's ability to generate profits or attract investment has eroded, resulting in a lower overall value. This is different from profit loss, as it reflects a reduction in the company's fundamental worth, which can make it harder to raise capital or survive long-term.