Should Walgreens complete the merger with alliance boots it will need to borrow money, that cost is tax deductible.
They also will buy back shares with borrowed funds also tax deductible on interest.
As Alliance boots is highly leveraged and cant really borrow much money, where do you think Alliance Boots Walgreens will find money for expansion,??
Debt will be added onto Walgreens balance sheet there by decreasing their USA taxes.
This savings will be spent outside of this country and not brought back.. its called asset stripping.
I think you are being too forgiving into how financial engineering works..
I have no problems with global expansion but using tax deductible loopholes with USA earnings, to pay for new global revenues never to be returned needs to be corrected.
3) Umleitung tax Pharmacia
beach, why do you continue to misrepresent the facts? You know the facts. A corporate inversion is not tax evasion, nor is it a loophole as long as is doesn't involve misrepresenting information on a tax return or undertaking illegal activities to hide profits. You make a lot of assumptions regarding Walgreens intentions. That is neither fair nor honest. You are right there with the politicians.
Walgreens will soon be releasing its decision on a Corporate relocation..
In doing so a New name for the Controlling Company will emerge.
Can you add to this list of Corporate Name Choices.
1) Loophole Pharmacy & Druggist
I ran through all the options and there really is not much you can do with this because they are VERY illiquid.... The bid/ask is prohibitivly wide to be able to overcome.
Obviously the Swiss have evolved much further than the American specie.
Some people have always been takers........now grabbers. Now the lawless want to enforce the law??? What a joke.
Switzerland does not waste tens of trillions on foreign meddling, foreign quagmires and oil wars and a huge bloated military budget.
Switzerland does have universal healthcare and a strong social security system, so walgreens workers will be better off in Switzerland and they should move there along with all of walgreen's stores .
the company corporate person that want to shirk paying taxes by pretending to move to Switzerland. (which has universal healthcare btw)
these bums want to take advantage of US schools, defense, law and order, infratstructure and so on with out paying for it. Time to boycott the bums.
Pretty simple, the stock has run up on speculation about the tax inversion. It's not trading on biz fundamentals. So more unknowns/uncertainties leads to higher volume and higher volatility. This will go on until they announce the inversion one way or the other then you will have a $60 stock or an $80 stock.
robbsbeach pointed that out a few days ago. It doesn't reduce the taxes Walgreens pays on the retail stores in the U.S.. What he seems concerned about is the use of questionable tactics to shift profits from U.S. to European operations. Apparently these types of tactics have been used by other companies after inversion to reduce U.S. taxes. I say, give Walgreens the benefit of doubt not to use shady accounting procedures. Most people seem to think that the inversion, if completed. would stop Walgreens from paying U.S. taxes. The air needs to be cleared on that point. The politicians need to back off. They can change the tax code or live with it. "Economic patriotism" is one of the most absurd concepts ever put forth by a reigning president.
As Walgreens is Working on Reincorporation oversea, A Harvard professor and legal tax expert Calls on President Obama to enforce tax rule Section 385, this" empowers the Treasury secretary to set standards for when a financial instrument should be treated as debt, eligible for interest deductibility, and when it should be treated as ineligible equity."
"If a corporation has loaded debt into a U.S. unit beyond a certain level, Section 385 could be used by the government to declare the excess as equity and ineligible for deductions."
As Walgreens will take on additional debt after its inversion and Write this off, Tax tools are in place to make this costly to Walgreens bottom line..
I have also been looking at this for a week or 2 and you are correct....no earnings until end of Sept..but Implied Volatility is at the 90+% percentile relative to its IV history and I just cannot find any reason for it.
Obviously it is a bunch of options screaming to be sold...But , like you, I feel there has to be a reason for this and I cannot find it....Just be sure to protect yourself when selling these High IV options
CEO in TV spot: "You may have heard that we could save a billion dollars a year in taxes by moving our official address to Switzerland. It's true, and we're under heavy pressure from Wall Street to do so. We've considered it very seriously, indeed, and as anyone who pays taxes must know, it's very tempting. But in the end, we've decided that would be wrong and we're staying put. Because... We're America's Drugstore." [flag waving, Norman Rockwellish scene in the background... unseen is that at CVS HQ, the CEO is cursing a blue streak]
Went in to get a bag of chips. The first thing is the cashier says "Welcome to Walgreens." "Thank you," I say. I see the chips I want are a 'twofer' deal with card, which they have a record of with my phone number, so I get the two bags and head to the cashier. The cashier asks, "Would I like two candy bars for two dollars"? There is a stand there with the candy bars and a sign pointing out the that 'twofer' candy bar deal. "No thank you," I say. Then I go through all the motions to pay using my bank debit card and putting in my phone number for the discount. Then the machine wants to know if I want to contribute to something. I push the button 'no thanks.' It seems to take forever to get done pushing all the buttons for this simple transaction. When I am finally done and about to walk out the door, the cashier says, "Thank you for shopping Walgreens and be healthy."
All for a bag of chips. What a relief it is to be walking out the door and getting the heck out of there.
I do get good deals on 10-dollar reading glasses there sometimes, though, when they are two for the price of one, I have to admit that.
Obama shouting that corporations only call themselves American to get benefits from taxpayers. Isn't that exactly what Obama has done since birth?
Why would GIC (Government Insurance Corporation) use a company that does not want to be here especially if it is for the sole reason of not contributing taxes? Pathetic decision on their part... let's make a great decision which supports the USA economy (not uses it for tax evasion or as they say inversion) ! Things can change right WAG lovers? You know how this "develop". Supports will spin now.
Why would GIC (Government Insurance Corporation) use Walgreen traitors for mail program/prescriptions? No taxes collected on all our prescriptions? #$%$? We need to change that fast !!!!!!! They made their decision let's make our decision !!