02.22.09
NoL Frenzy
Tax laws disrupting the natural workings of the market . . . or the market conforming to the artificial curves of the tax laws? You decide:
Some investors are baffled why media titans John Malone and Charles Ergen are competing to throw money at Sirius XM Radio Inc., the money-losing satellite-radio company that was perilously close to bankruptcy.
But in fact, the company’s most valuable asset could be precisely all the money it has lost.
Sirius XM has at least $6 billion of tax losses, according to securities filings. That means that the losses it has accumulated over the years can be used as deductions to cut taxes on future profits.
Link.
I wonder if that new tax provision (see immediately below) might increase the interest in Sirius. The buyer might be able to take immediate advantage of the losses . . . though the buyer will have to deal with the limitations imposed by IRC S 381.
