Steve,
<<First, It is not entirely clear whether the discount from sales due to the sun warrants will be deductible for tax purposes.>>
This is in agreement with my couldn't-be-less-informed opinion. Why would the IRS allow such a deduction? Wouldn't this be a great scam for a company to evade/avoid taxes? Hey, we're stuffing money into our coffers hand over fist, but see, we're not profitable.
I would like to have a better feel for how the smart money will react to ramping sales, and possibly negative gross margins. Will low/negative margins retard the appreciation in price ANCR would otherwise receive? How will ANCR be valued - P/S ratio, P/E ratio, intrinsic value?
The preferred offerings scared away other financing sources. Will the Sun warrants result in a low market cap, making a buyout more likely in the near future, or will they repel stock buyouts from companies who do not want Sun to own their stock?
In retrospect, I think we could have figured out the potential impact of the convertible preferred offerings much sooner than we did and before the stock tanked so badly. I would like to be less ignorant of possible ramifications of the outstanding Sun warrants. I wonder how common this technique is as a sales incentive and how those companies fared.
I appreciate hearing the reactions from your tax department, and would be grateful if you would share anything else you might run across.
Greg |
