Bed Bath & Beyond Inc (fka BBBYQ)

[MoneyMaker111]

BBBYQ: Why Net-Operating-Losses will preserve and reward shareholders

Net Operating Losses (NOLs) can be carried over to an acquiring entity. These NOLs reduce the tax liability of the acquiring company. The last 10k had the NOL amount around $3.5 Billion. Some have estimated this to have an actual value of $880 million.

The Kirkland and Ellis lawyers really made a big deal about preserving the NOLs. Their argument was that it increased the value of BBBYQ. But this value would only be unlocked by the right type of acquisition due to Ch 11 limitations.

On May 31 2023, the Bankruptcy court approved the Final NOL Order which prevented any major change of share ownership without court approval, which in effect, preserves these NOLs as a valuable asset to be utilized by a potential acquirer.

The Kirkland and Ellis lawyers were preserving the NOLz for a very specific type of buyer.

In order for the NOLs to be preserved, the acquiring entity must do a few things:

1. They must continue the same type of business.

2. They must acquire the company via a Stock Purchase, not an Asset Purchase.

3. They must also acquire the existing debt (now only $1.7B, which is far less than equities

4. More importantly, they must maintain 50% ownership of the new entity by existing shareholders.

5. They must maintain this for 3 years after the purchase. They can achieve this by issuing new shares in the new entity to existing shareholders of the old entity to insure that the percentage ownership stays within limits.

So, Overstock does not get the NOLz.

"Dream on Me Industries, Inc" (HAHAHA) does not get the NOLz.

So who gets the NOLz? We don’t know yet. All that matters is, that whoever they are, they want the NOLz and are willing to play by those rules to get them. Those rules protect current shareholders from being left out of the deal. That’s it. That’s all that matters.

But what about the debt? Well if some buyer already owns a large amount of the debt, they don’t really owe that amount to anyone anymore do they? Maybe that acts as a credit toward the purchase? But what about the debt they don’t own, but will owe? Well, if a deal like this happens, and the stock price goes the way of a previously known event, issuing new stock on the way up could possibly payoff said debts. Regarding the amount of stock being held in BBBYQ Treasury, this situation starts to look very enticing. Maybe it was not an accident that there was so much confusion about what the TSO (total shares outstanding) count was...

After months of the already-anticipated misinformation we saw, I am comforted by this simple fact. BBBYQ lawyers fought to protect the NOLz, knowing full well that they are a key component of the deal they really wanted.

We'll find out on or around July 7th just how quickly short sellers of this stock will not just be margin called... but how quickly they will be liquidated.

"Either way, BBBYQ goes up, and BBBYQ long shareholders win."

$BBBYQ
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