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Microcap & Penny Stocks : BYX- Bayou Steel -- Ignore unavailable to you. Want to Upgrade?

To: John S. Baker who wrote (38)	2/17/1998 11:59:00 AM
From: Franklin M. Humphreys	Read Replies (1) \| Respond to of 101

Well John; There are lotsa people on these threads that probably know more about this kind of thing but my thinking goes like this. (please bear in mind that I have not verified these numbers and if anybody wishes to point out the fallacy of my thinking that is just OK.) With $262 million in tax loss carry forwards, all of the gross profit up to that amount that BYX can generate in the time remaining moves directly to the bottom line without being impacted by tax burdens. My guess is that BYX mgmt has looked at this and concluded that BYX by itself is not going to have that much gross profit and therefore any tax loss carrys which expire unused are just money down the drain. By acquiring NWSW they increase their ability to generate a profit closer to the value of the losses (this hinges on several factors, one of them being whether they have hedged their fuel costs going forward) Ergo: to the extent that they salvage the tax loss carryforwards they reduce the net price of the acquisition dollar for dollar. I must iterate that probably there are those who can put a different spin on this and I welcome any contrary opinions. Frank