$380mm for $300mm in cash, $2.8bn in NOLs, a catalyst that happened yesterday

Today’s ignored small cap has a market cap of $380mm and:

• $300mm in cash

• $2.8bn in federal NOLs

• $9.0bn in state NOLs

• An activist CEO who was brought in to monetize the NOLs

• A catalyst that took place yesterday that removes most risks and accelerates the timeline for monetization

Although the stock was up 20% yesterday, I believe the risk/reward and IRR of the investment is superior today. Usually the risk with NOLs is that monetizing them quickly and fully is difficult because it requires substantial funding to make an acquisition, and management may not have the willingness or ability to make a good acquisition.

These risks are now minimal in this case.

This article discusses how the NOLs could be monetized, why the news yesterday was so significant, and why I believe the company will make an acquisition in the next few months that will generate up to 80% upside and an even better IRR.