But only to $10,000 - total - for the quarter.
ELLH remains the WORST NOL shell holdco I have ever seen.
- Management siphons off $0.70 of book value quarterly
- Revenue is up to $10k per quarter - far less than most freelance businesses generate
- The only hope for the business is a deal, but unsurprisingly, the potential partners in the deal are unenthusiastic about taking on the burden of the fixed costs ELLH brings as the price of its tax shelter.
- Again, large firms that could probably carry the costs are too large for a firm with such a small asset base to acquire, and the reverse (acquisition of ELLH) nullifies the tax shelter
- As the asset base is siphoned off, the target set becomes ever narrower, and on average, even smaller, making the burden of carrying ELLH management's lifestyle payments more expensive.
- There are indeterminate but potentially significant and likely very long tail / long term legal overhangs from prior operations, which further reduce the attractiveness of ELLH (but provide incentive for management to siphon off the assets before they can be attached, tho fraudulent conveyance remains a risk, I suppose. Still possession is 9/10th of the law, as is said).
- Part of the risk in [6] is that management from the prior operations remains at the apex of the holdco. So the same people more or less who ran the prior businesses into the ground are supposed to buy and build some other business they aren't even experts in?
Amazingly this trades at more than 2x book... A massive cash hemorrhage with no operations and plenty of management lifestyle comp, with decreasing prospects as its resources are siphoned off.
Alas, the incredibly thin float makes it impossible to short this.
https://seekingalpha.com/news/3605980-elah-holdings-reports-q2-results
