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Re: Tropic Networks' Odd Survival Plan
by
Blogger_Brent
This is definitely a tax loss sale. Interestingly in Canada, this loophole exists to allow completely unrelated companies to essentially move their accumulated tax losses, minus any SRED received, to another entity that has profits it would like to shelter. In the US, where tech companies accumulated gobs of tax losses in the tech meltdown, this is not allowed. You have to be a company almost directly competitive (in the same business) to effect this transaction.
Most tax loss sales do not generate a press release because they are done as a last resort to get preferred shareholders (i.e. VCs) and creditors some cash. The company does not exist any more.
As for the optical industry precedent, Bookham just did this in June to free up cash, only they did it in Britain with aircraft leasing!!!
So, not so odd when you are trying to survive in an industry as bloodied as optical networking...
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