NOLs and Shell Value
no disrespect on this- NOL's can't be used in a R/M if the survivor owns majority. The NOL's can only be taken to the amount the majority invests. Pink Shells go for about 50-150k so that will be about what the NOL will be (this is an IRS Rule, I think code #356).
Very doubtful the investment firm "bought the losses" since this is a "C" Corp and the losses can't pass through. They just simply lost their money. I bet you could call them and buy their shares in a private transaction for less than market if they even want to fool with it. My guess is they already realized the loss.
It would just not make any sense to "lock" the money in a bankrupt pink when they could just buy Bank of America, loose the same amount and still sell and get some of ther cash back. This way, they will never been out of it- until they sell it (who would buy it?).
It would be hard to invest in a company preparing for an R/M. The majority usually issues itself voting shares or more common and the float will be very small. Then, usually they will reverse to get the share structure right and the float will shrink.
While I am sure it is possible to invest in a pink that is preparing for a R/M- it just seems awfully risky and a waste of time.
One good way to find a good pink is to find one with shares that are trading at high prices with "no information". If you see one trading at $10 a share with little volume. You might find they have only 200,000 shares out. Now, you've found a great company to investigate and research. You can buy 1-share and request an annual report and see what's in there.
R/M's are fun- but you really need to be in one after the R/M not before. Remember the majoirty has to hold their shares for 1-year post RM. Wait that year, and see what they do- that's what you do.
-RE
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