Answers
True
An unusually low price for encourages the management to take the company private as they can take the company into private hands and streamline the process so that they can again go public with a higher valuation.
This provides opportunity to buy equity of the company at a lower valuation than what the management feels its correct valuation is and the company can utilize its cash on hand by rewarding its current investors.
An example for the same is Dell when in 2013 Michael paid $25 Bn for management buy out to go private.
This can be challenging some times as the management is becoming owner from an employee in this process.
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