SOFN looks like a reasonable bet to me. I'm a buyer today.
I am assuming that company is adhering to its obligation to seek the highest price for its stock. Which includes selling those net operating loss carryforwards to a potential buyer. I assume there are at least a few companies left that still pay taxes and would use those NOLs.
I further assume that management would like to be acquired as part of the deal they strike. That is, they want to keep their management jobs (salaries) or get consulting/contracting compensation.
Should no acquirer materialize, should NOLs have little value, I would hope the company would take the next step for stockholders, which is to liquidate itself.
OTOH, management might decide their own best option is to redeploy SOFN cash to new business ventures. From the latest news announcement, it's not clear at all to me that sale of the company is the only option. "...We think it is in the best interest of our stockholders that we also explore transactions which focus on our approximately $73 million of cash at October 31, 2001 and our status as a Nasdaq-traded public company. Since most of our stockholders invested in us as a technology company, we will be especially interested in transactions in that area." If they use cash to become a buyer of somebody else, rather than a seller to somebody (or just liquidate), then imo, the stock at current price is not necessarily any bargain.
Paul Senior |
