Live Deal, Inc (LIVE)

[CynicalObserver]

weird deal on eps. if you back out the tax reform loss and the bargain asset gain, they did around 1.45/q. To me those are very impressive numbers, but once again the stock doesn't care.

I imagine there is skepticism over the entire gain on the purchase they added in. also there is this covenant issue on the lender/seller of vintage, and what else?

then they restate several quarters and i cannot claim to really understand if it was material.

lots of questions on the call. a few very detailed trying to elicit details. some details forthcoming.

they continue to buy back stock.

should the tax reform have been understood to require a write-off vs eps? I hadn't seen it mentioned yet but I would think any company with substantial carry-forward losses would have the issue come up depending on how they had accounted for them. I am sure there is concern the whole bargain asset gain was an offset to the tax reform loss. Like the first caller, I had never even heard of this type of gain category, and suspect micro-cap companies that could claim one often decline to. this would make this 'aggressive accounting tactics' in some views, at least for a small-cap buying unknown companies which would be hard or impossible for an outside party to value with any detail, potentially. I am not at all saying LIVE didn't value the bargain purchase properly - I am saying I have no idea how anyone could know either way.

https://www.investopedia.com/terms/b/bargain-purchase.asp

What is a 'Bargain Purchase'
A bargain purchase involves assets acquired for less than fair market value. In a bargain purchase business combination, a corporate entity is acquired by another for an amount that is less than the fair market value of its net assets. Current accounting rules for business combinations require the acquirer to record the difference between fair value of the acquired net assets and the purchase price as a gain on its income statement due to negative goodwill."



either something is wrong with this company or something is wrong with market's perception of it and it is a tremendous bargain. I have no idea which it is.

Forward PE is something like less then 3. there are chinese smallcaps with higher ratios than that and no one even knows if those companies even exist beyond a sheet of paper - here this is a US -based company doing business in the US.

Wouldn't it have been simpler to not record a bargain purchase, headline the eps before the one-time tax reform loss, and then put that in the byline?