Is a financial theory that is starting to be discussed among academics in the US and internationally after the recent Sub-prime crysis. It was originally developed at the Wharton School of the University of Pennsylvania by Paolo Alberoni and published in the form of Paper in 1994. The SOV thoery arguments a relative limit of the CAPM as it fails to incorporate in WACC the decision Power for Sharholder (Owner) to decide the destination of the company/assets Cash Flows.
In the Paper, Alberoni shows evidence and structures a reference framework demonstrating how stock exchange fails to capture the full value of assets in the long term and therefore undervalue them in the long run.
Inessence, under common wisdom a company that dismisses real assets and lease them back, gets benefits from tax breaks, better liquidity etc. The SOV theory looks back and demonstrate that "assets free" companies are more vulnerable to extreme shocks and have recorded performance in line wth "asset loaded" companies in the same field.
The paper therefore highlight how the ownership of assets in downturm times allows a company with lower fixed costs, higher cash flows to compete in difficult times, and therefore that there must be a "missing part" in the original valutazion.