Well, well, well.
I've always been curious what happens to company when things spiral out of control like they did here. This is the first time it has happened to me.
I believe there are individuals who will buy up the worthless paper stock of companies like LONE for pennies or fractions of a penny per share in the hope of recovering some nugget of gold out of the assets. The purchase is done like a buyout, except at fire sale prices. So if your stock is in street name, the broker simply turns the paper over to the appropriate party and your account is credited the lunch money amount. In other words, you don't get charged a commission.
So what would LONE's assets be? One might be any money obtained from the debenture holders. Clearly they can't be creditors of LONE's unless they gave LONE money. Where did the $$ go? That's pretty important. Perhaps it was used to pay expenses or to settle the class action lawsuit or has been looted by the former management or the present receivership. Or perhaps it is lurking around somewhere. (I doubt it - Unless someone is watching, lawyers make money disappear.)
O.K., I have to believe that if there were some sizeable amount of cash hiding in a bank account somewhere, the stock would not be selling at 1/64.
What about the name or the incorporation? I don't think there is much here, although the fact that it is a publically traded corporation has some value, but perhaps not very much these days now that the internet-ipo boom has burst.
About the only thing I can think of that offers some potential value would be a favorable judgement in any civil proceeding the company was a plaintiff in. This is the one thing shareholders held out for. But according to PUCK, LONE is not longer party to the suit. So there's a big fat zilch.
So what nuggets of gold might be buried in LONE's cellar? Did LONE or NAAC own any swampland in Florida, bridges in Brooklyn, or perhaps invest in a free energy franchise? There's nothing like a perpetual motion machine to attract the dough.
And speaking of assets, that class action suit, if not settled, might be a big liability for any potential buyer.
So, without tangible assets, no ongoing activities, no employees, no possible windfall from litigation, but still some creditors who are ahead of the stockholders in the distribution of any found money . . . what happens.
I think I know. My parents once owned a stock that collapsed like LONE. No one bought it. It's stock stopped trading. I presume it eventually lost its incorporation, but before that my parents unilaterally reported it as a total loss on their taxes, and that was that. They still have the stock paper. I asked my father what would happen in the extremely unlikely event that the company rose from the dead. He offered several reasonable answers like amending the tax return or figuring any profit based on a zero purchase price, but his last advice was best. He said he'd cross that bridge when he came to it. The company did not rise from the dead by the way.
So, I guess for now we wait for someone to buy us out or if it stops trading, just put down for a total loss. Sometimes education is damned expensive.
Bobb |
