|
Post by bullishbear32 on Oct 15, 2012 20:27:55 GMT -5
Over an extended period of economic weakness, NOL carryforwards can become one of the largest assets on a company’s balance sheet. Under normal circumstances, the NOLs can serve to offset future taxable income, resulting in tax savings as the company begins to be profitable. However, current tax laws impose significant limits on the ability to use NOLs to offset taxable income in the event of an ownership change. Thus, a company can be in a situation in which one of its largest assets can become impaired if ownership changes. Recent steep declines in equity markets have made it less expensive for investors to acquire significant percentages of a company’s publicly traded stock, aggravating the risk of a possible limitation. Section 3821 limits a loss corporation’s ability to use its tax net operating losses following an "ownership change." ]An ownership change is triggered if one or more 5-percent shareholders of the loss corporation increases their ownership in the aggregate by more than 50 percentage points during a testing period.2 Once an ownership change has occurred, the amount of NOLs that the corporation may use to offset taxable income in any year is limited to the "Section 382 limitation" resulting from the ownership change.3 Thus, corporations with large NOL carryforwards are concerned with monitoring shareholder shifts that might trigger an ownership change and impair the NOL asset on their books. Boards of directors of publicly traded companies with large NOL carryforwards are increasing their efforts to protect this asset, and some companies are adopting "poison pill" plans to restrict the ability of shareholders to take actions that could trigger a Section 382 ownership change.[/size][/color] Read more: www.pepperlaw.com/publications_update.aspx?articlekey=1508
|
|
|
Post by bullishbear32 on Oct 15, 2012 20:35:24 GMT -5
Common shareholders are dead last in the bankruptcy waterfall and are often wiped out. NOLs are often a chapter 11 company's greatest asset. Max NOLs can be reserved by the reorganized company by using EITHER old cold debt OR old cold equity. That old/cold debt/equity must represent 51 percent of the newly issued shares. In many reorganizations they will use a debt for equity swap with old/cold creditors and those creditors will represent 51 percent of the new company. That is how most reorganized companies out of chapter 11 maximize NOLs but are able to cancel all former common shares.
This is from an ihub investor about a totally unrelated account. (i know, not credible). This would seem to say we can't be diluted more than 49% though. Not saying being diluted like that is a bad thing but it's a much safer backup than being wiped out completely
|
|
|
Post by bullishbear32 on Oct 15, 2012 20:44:09 GMT -5
NOL and Tax Credits - Valuation: unknown. Kodak currently has approximately $1.9 billion of Net Operating Losses ("NOLs") for U.S. federal income tax purposes and $656 million of foreign tax credits. Wapiti’s analysis assumes that a significant amount of the proceeds from the sale of the Digital Capture and Kodak Imaging Systems patents are not taxed because of losses incurred in settlement payments for Non-U.S. Pension Liabilities and Other Post Employment benefit payments. Any gains on the portfolio which are not shielded by payments for these legacy liabilities are assumed to be shielded by Kodak’s NOLs. The NOL’s and tax credits should be valued based on the present value savings of Kodak’s future income stream. This value should be substantial (close to $500 million or almost $2 per share) but it is too preliminary to be included without access to company projections. www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CCAQFjAA&url=http%3A%2F%2Fwww.prleap.com%2Fpr%2F185060%2F&ei=arp8UODyLar40gGsz4CABg&usg=AFQjCNGf6C9iojp_7fsU7fwlq3sFVjWFNg&sig2=8YoYRaNQVK6Efz2XeppY7A
|
|
|
Post by mikewestveer on Oct 16, 2012 19:36:55 GMT -5
Diluted somewhat or 100% safe, the common is here to stay. That is what matters. Either way it is going up at least 1000% in the next year.
|
|
|
Post by TheBondKid on Oct 16, 2012 21:56:25 GMT -5
Diluted somewhat or 100% safe, the common is here to stay. That is what matters. Either way it is going up at least 1000% in the next year. You'll be lucky to break even when Kodak emerges from chapter 11 My karma is going down faster than Beer on st pattys day...... So many people are smiting me...... On Wall street its good to be in the minority.....
|
|
|
Post by cswift71 on Oct 16, 2012 22:03:44 GMT -5
Diluted somewhat or 100% safe, the common is here to stay. That is what matters. Either way it is going up at least 1000% in the next year. You'll be lucky to break even when Kodak emerges from chapter 11 My karma is going down faster than Beer on st pattys day...... So many people are smiting me...... On Wall street its good to be in the minority..... Not sure it is the truth they dislike my friend.
|
|
|
Post by jacksonhole1965 on Oct 27, 2012 19:25:57 GMT -5
I thought I would bring this one back to the top for those who have forgot or have not seen yet.
|
|
|
Post by updated on Oct 28, 2012 2:37:23 GMT -5
Good work guys.... now I will be buying more.....thxxx ....lol Arctic disappeared ....Great
Also....kid, can you zip it?
|
|
|
Post by logik360 on Oct 28, 2012 9:49:23 GMT -5
In my opinion, benefits of the NOLs also point to a buyout/merger - much like the Google/Motorola Mobility deal. Otherwise, we would need multiple asset sales (patent, divisions, settlements) in succession (and with great results) to get the pps to relevant levels.
In my opinion, Occam's razor is doubled edged: 1) NOLs and 2) IP pipeline. Both signal a buyout.
|
|
|
Post by mikewestveer on Oct 28, 2012 9:55:10 GMT -5
Logik,
haven't people been saying the buyout/merger would have to be structured very carefully for all the NOLS to come through the process...What is that structure?
...I think that the NOLs if they come through even 50% are the greatest reasons pointing towards a buyout...companies love tax write-offs, and if the acquirer gets the NOLS, their value plus cash on hand would almost 100% let the acquirer cancel out the legacy costs.
Therefore, even if they offered 5 Billion, it would be with the legacy costs almost entirely whited out, which would be great for the acquirer and the Shareholders...
3 Billion for the patents or 5 Billion for the whole enchilada... I still believe that Kodak would ask for more than 5 Billion (-8 Billion with legacy costs which would be whited out)...
We could wake up one morning and have a $20.00 buyout on our hands...thoughts?
|
|
|
Post by logik360 on Oct 28, 2012 10:18:38 GMT -5
Mike,
Kodak has been facing NUMEROUS complexities. How the NOLs are juxtapositioned with these complexities remains uncertain. But the Google/Motorola deal simplified matters under the guise of a patent purchase. Simple and brilliant.
Now, let us throw into the mix the benefit of a lawsuit settlement may have to a potential buyer ($500M - $1B). Two parties stand out:
1. Samsung 2. Fuji
One could argue, why would Samsung need to concern itself over the wrangling of $500 M here or a $1B there?
|
|