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Technology Stocks : Dell Technologies Inc.

DELL 127.22

+3.8%

3:59 PM EST

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To: Chuzzlewit who wrote (147507)	11/16/1999 4:14:00 PM
From: jim kelley	Read Replies (2) of 176387

CTC, Re: "But the fact remains that it is a terrible distortion of the purpose of GAAP accounting. By sweeping acquisition costs under the rug you get to maintain abnormally high earnings and also get to boost your ROIC since the cost of the acquisition is eliminated from the capital base. Pretty neat trick!" DELL's earnings were adjusted for the purchase of ConvergeNet. I believe the charge was 7 cents per share. So I fail to see how this is sweeping the charges under the rug. Since DELL apparently paid for ConvergeNet with stock. It seems to me that the expensing of the R&D simply decreases their taxes by .3 X 177 M dollars. Meanwhile, the stock is diluted somewhat by the acquisition and their cash position is enhanced by about 53 M. Regards, Jim Kelley

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