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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: jeffbas who wrote (13682)	1/12/2002 5:14:16 PM
From: Allen Furlan	Respond to of 78958

Jeffrey, thanks for post on NOL's. Helps explain price on sofn although I have not ruled out this as a reasonable speculation. For the thread here is one that is hard to find news on.http://messages.yahoo.com/bbs?.mm=FN&action=m&board=7080407&tid=pdlpy&sid=7080407&mid=240 I have been picking up a small number of shares of pdlpy every month or two over the past year.

To: jeffbas who wrote (13682)	1/13/2002 7:24:15 AM
From: blankmind	Read Replies (1) \| Respond to of 78958

On SOFN (Softnet), I think the net operating losses can be fully taken - it's tricky - but i think SOFN has to be the surviving company - so SOFN takes over company A - & all of company a's profits then go untaxed until teh NOL's are 100% drawn down - but don't hold me to this thanks

To: jeffbas who wrote (13682)	1/14/2002 2:39:38 AM
From: Bob Rudd	Read Replies (2) \| Respond to of 78958

Jeffrey: Thanks for NOL info. I dug thru about a dozen texts before coming across a decent explanation of this...which pretty much confirms what you've so well stated here. Basically a change in ownership and a change in business kills the NOL. A change in ownership while maintaining the lines of business produces the limitation of taking the loss in annual increments limited by the tax exempt bond rate and equity value before the change. There are other limitations and constraints - it's a real bag of snakes. As to structuring this as a deal where the company that has the loss buys a profitable business as blankmind creatively suggested, I suspect there are provisions that limit this...it's pretty apparent that a lot of folks have spent sleepless nights making it difficult for a NOL to survive an ownership change intact. Thanks again for NOL insight. I have no SOFN, but this signficantly alters value and margin of safety in other situations compared to what I had previously assumed.