RE:RE:Some news So just in speaking with my in-law, who is a tax lawyer, companies will often purchase similar companies who currently have accumulated tax losses. The reason is future planning to write down the tax off of the purchasing company when and if they become profitable.
GRL was just your run of the mill smaller company similar to AOC now. The difference is the assets GRL had were not profitable. Purchased at a high price and big costs to get them running, which is often the case. Someone thought they would capitalize on a downturn a few years back only for oil to plummet and continue to disappoint.
i think AOC is in a little different situation so long as oil makes a big comeback. Low risk, cheap purchase with a
"strong possible future", pending a rebound of the commodity.
The big issue I see with AOC is they don't have a lot of runway cash and may rely on private placements or borrowing to keep going. If oil doesn't come back they could run themselves in to the ground.
On the flip side oil could make a huge comeback, AOC is well placed to deliver on their big pipe dreams (pun intended) to deliver a big profit. Then this tax shelter could be a win.
anyways this is only my 2 cents and my own opinion of on how I read it. Just hoping for the best. Shares were cheap and the possibility of a return was worth the risk of a few bucks for me.