1500 employees on an average of $100k pa is approx $195m dollars in salary, taxes, benefits, etc. If you have a bunch of engineers and that average is more like $150k, it goes even faster.

They raised $260m in April 2022.

No customers. If you get $1Bn in funding that doesn't mean you get to hire 10 people and never run out of money. You have to hire 500 people and run out of money in 5 years!

1.1B in NOLs. How does this not become a $200MM acquihire by UPS pre-bankruptcy? I’m asking because I would assume that the tax mitigation could be an asset and feel like I am missing something. I am not an accountant, but would love for one to explain why bankruptcy is the best choice.

Why would UPS be interested? They just sold of their freight division to T-Force in 2021.

Because they have a pretty significant outstanding lending portfolio that they are on the hook for. See: https://twitter.com/adam_keesling/status/1715063558898364602...

Convoy effectively got into the factoring business and extended short term (30/60/90 days) loans to the trucking companies. Now, they don't hold these loans on their balance sheet but rather package them and sell them to lenders as asset-backed lending portfolio.

The thing with these is that typically the originator (in this case Convoy) will need to take the first tranche of losses. (This is where the $240M debt facility came in). As the freight market deteriorated, Convoy was effectively margin called by the lenders and could not come up with the money.

Any acquirer would then have to take up this debt. Even though Convoy may have a valuable asset, UPS is not in the business of managing a debt portfolio. Any acquirer would be dissuade by this baggage.

Thank you so much for the detailed response. This makes perfect sense.