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I've thought about this too and have mentioned it to friends a couple of times. Not sure if bankruptcy, but it's a way to get tax credits if it's not successful
by rovr138 3y ago
I've thought about this too and have mentioned it to friends a couple of times. Not sure if bankruptcy, but it's a way to get tax credits if it's not successful.
- RugnirViking 3y agoi dont remember who said it but isnt there a famous adage in the accounting world that its not a smart idea to get tax credits by making actual real losses. You're supposed to find ways to make book losses without actually lighting real money on fire
- rchaud 3y agoThat's why companies pay for acquisitions or mergers primarily in stock. It keeps cash reserves available for other uses. If the acquisition flops, you can write down the value, take a hit on the income statement, and lower your tax owed for the year.
- lotsofpulp 3y agoThat is why sellers do not always agree to accept stock instead of cash.
- rchaud 3y agoWhen in the "billions" range, the deals are going to be light on cash. That's how Adobe can "pay" $20bn for Figma using stock.
- lotsofpulp 3y agoI believe twitter was an all cash transaction. https://www.sec.gov/Archives/edgar/data/876661/000087666122000890/0000876661-22-000890.txt https://www.sec.gov/Archives/edgar/data/876661/0000876661220... > The merger between Twitter, Inc. and X Holdings II, Inc., a wholly owned subsidiary of X Holdings I, Inc., wholly owned by Elon R. Musk became effective on October 27, 2022. Each share of Twitter, Inc. Common Stock was exchanged for USD 54.20 in cash, without interest and less any applicable withholding taxes.