rpl

Dry Clean USA: Deep Value in this Micro Cap

I like the valuation and steadiness of the company, but have no confidence in the management. They clearly tried to take advantage of outside shareholders last year, unless you have some clear indication that management is going to do something minority shareholder friendly I would stay away.

Tucows: Too Good to Ignore

Don't forget the 3rd announced dutch auction to buyback stock.

GM Common Stock Is Worth More than You Think

Depending on the irrationality of herd traders is not a good way to live.

GM: Are We in Looneyland?

Not significant.

If a firm goes into bankruptcy the value of its NOLs is impaired as noted in IRS code 382. While the losses are still officially on the books, the company takes a valuation allowance on the date of the impairment and is only allowed to use a fraction of the valuation allowance (I believe it is 5%) annually. Since the NOL carryforward period is 20 years, you can only end up using $500 million of tax losses over the 20 year period (despite the fact they have billions).

If you don't use the tax losses in the carryforward period they expire worthless.

GM: Are We in Looneyland?

I think some of it is the fact that GM has not yet officially been removed from the DOW and other indices (I believe the dates is June 8th for the Dow).

Since it is still part of the Dow, anybody who buys a DOW index fund today forces the fund manager to make a purchase order for GM. Despite the fact that everyone knows this is going to BK, and at some point soon the stock will trade down dramatically.

The Silly War on Vulture Funds

How are what vulture funds do different from the hedge funds/mutual funds who bought Chrysler debt at a discount and expected to have their contractual rights upheld?

'Surgical' Bankruptcy for Chrysler

I will take the under if you provide me 50,000 to 1 odds. My wager is $100.

Sachs's Nationalization Idea

Under Sach's scheme the bank in question would not need to raise outside equity, I believe, they would simply be diluting existing shareholders to make whole the government on its losses.

If a bank is currently worth 10 in equity (100 in book assets minus 90 in liabilities). And has 20 in dodgy assets. It gets 20 today for assets, and the government attempts to dispose of them in an orderly way. If it ends up with 20, then their are no warrants issued and the bank is made whole. If it ends up with 15, it needs to acquire 5 in value from the bank through warrants. This would not be cash, but equity in the underlying (which would dilute stockholders by 50%). If it only got 8 for the assets, it would need to get 12 in value (not possible since their is only 10 in value), and would essentially own the whole bank..