SI
SI
discoversearch

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 : Dell Technologies Inc.
DELL 134.69+6.9%1:00 PM EST
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Michael G. Potter who wrote (147548)11/17/1999 2:37:00 PM
From: Chuzzlewit  Read Replies (1) of 176387
 
Michael, I agree with this from an earlier post of yours:

If the valuation is not extreme, then the dilutive effect of the extra shares issued or the cash paid out will approximate the effect of capitalizing it and amortizing the investment.

The problem is that valuation often tends to be extreme in technology acquisitions.

I do agree that the constantly recurring non-recurring charges become a joke. Restructuring reserves are far worse than a compnay that continues to grow and acquire, imho.

Absolutely! You get to sweep away future costs by expensing them now and artificially boost future earnings. Happily, an astute investor can easily recast the financial statements to restore a semblance of sanity to this nonsense. That's why cash flow analysis is such a potent tool. Unfortunately, no such easy fix is available when accounting for employee stock options, which, IMO, remains the single biggest distorter of financial reports.

But here I respectfully disagree (if you are talking about an acquired company) You really shouldn't capitalize R&D. The supposed synergies and cost savings are the rationale behind capitalizing goodwill. Why should acquired R&D be any different? Just as expected synergies and cost savings fail to emerge, so do IPR&D projects. I guess my point is that the rationale for buying such companies is often the IPR&D.

Thanks again for engaging me in a stimulating discussion.

TTFN,
CTC
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News