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Technology Stocks : The New QLogic (ANCR) -- Ignore unavailable to you. Want to Upgrade?

To: Greg Hull who wrote (27511)	7/18/2000 10:00:53 AM
From: ShamukE	Respond to of 29386

The rational is: The IRS does not want profitable companies to shop around for a company with a huge NOL. They would then attempt a merger so that they could use the NOL to shield their income from taxation.

To: Greg Hull who wrote (27511)	7/18/2000 2:29:54 PM
From: Logain Ablar	Read Replies (1) \| Respond to of 29386

Greg: The short answer is no it isn't allowed. At one time companies had the ability to buy a company with NOL's and contribute investments into the acquired co. and shelter the income. Now this doesn't work. Nor would the acquirer be able to contribute or infuse profitable lines of business into the acquired. As for going into long detail if I made this long I'd have to start citing the code and related regulations. I'm not about to take the time. As for your specific questions. What is Ancor after the merger? A seperate legal entity owned by QLGC. Are all switch products - current and future - automatically Ancor products? Depends on who develops them. Are HBAs automatically not Ancor products? Right they are QLGC products. Are you saying QLogic cannot reorganize their product lines by market, i.e. chips and enclosure management, FC SAN products, InfiniBand, and still recoup the NOL? Right as much as QLGC can develop a business reason for this the Treasury will view this as QLGC's attempt to utizize the NOL. Creative minds worked many ways in the past to avail themselfs in situations like this. I think it was the 1983 tax act which did away with this "loophole". Tim