Doug,
You said:
" In making a valuation ,descriptive
words like suggested,seems and beliefs are not meaningful and therefore carry no
weight."
I see you are among the more cynical of web surfers. While this is a healthy trait, I did not realize that the burden of proof was on me. I was trying to provide information from memory which you, if interested, could verify. This information originally came from press releases and conference calls. The words suggested, seems and beliefs were used by me to indicate imperfect memory, not hype or speculation. I'm actually mildly offended that you would imply that.
"I am not
aware that there are many Companies that have shown growth thru Alliances"
Are you aware of the term "OEM"? This term describes an alliance between two companies where one company buys products from the other, incorporates them into other products, and resells them. This form of business is so integral to the functioning of the technology industry that no growth would be possible without it. For example, do you think Dell would grow it's revenues if it could not include disk drives with it's computers? On the other hand, would you find it necessary for Dell to PURCHASE a disk drive manufacturer in order to grow it's revenues? The answer to both is no, and the solution is an alliance called an OEM agreement. Further examples of this are so numerous, from the smallest resistor to the biggest jet engine, that I could not possibly do justice to the importance of alliances to the growth of companies.
"If Alliances were so lucrative, the number of Take-overs
would be far less."
Incorrect. If Take-overs were not so lucrative to corporate executives, the number of take-overs would be far less. The bigger your domain, the fatter your wallet. There is a long and ugly history of the damage wrought upon the business landscape by fads of conglomeration, which gives a short-term kick to illusory accounting earnings while doing nothing to increase the intrinsic economic value of the enterprise. No I cannot prove this. It is an opinion.
"I believe Investors would do
better if they focus on the valuation of the business rather than speculate on the
effects of every tidbit of news. "
I could not agree with you more on this one....that's why I occasionally try to steer the conversation towards focusing on the bigger issues. I haven't had the time lately to do much valuation work...that's why I haven't got the value of those big contracts at the tip of my tongue. I do however firmly believe that it is worthwhile to speak qualitatively about a company, without being required to translate it's every virtue or wart into approximate earnings per share impact.
Regards,
Andrew |
