Lucent Technologies (LU) Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Lucent Technologies (LU)

LU 2.515

+1.0%

2:01 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: John Malloy who wrote (9073)	8/9/1999 1:17:00 PM
From: Chuzzlewit	Read Replies (2) of 21876

John, your valuation methodology is not at all clear from your post. Is it based on dividend capitalization, or is it based on growth of equity per share? If it is based on the former how do you deal with companies that pay no dividends or use stock buybacks as surrogates for dividends. If it is based on the latter, how do you deal with such issues as variable accounting treatments of mergers and acquisitions? For example, IPR&D write-offs (the current fad under purchase accounting) lead to an immediate decrease in equity, while capitalizing these investments leads to goodwill which amortizes this intangible? Finally, how do you deal with the issue of risk? Clearly, the earnings stream of some companies are much more risky than others. NITE is an interesting case in point, in which the emergence of ECNs over the past few months (along with some other factors) has caused the stock to go into a tailspin. It is my belief that the best way to value companies is by capitalizing free cash flow (using a risk-adjusted discount rate), and ignore accounting earnings and balance sheet accounts. TTFN, CTC

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next