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Technology Stocks : Lucent Technologies (LU)

LU 2.415

+1.9%

Nov 21 9:30 AM EST

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To: Prabhu Kavi who wrote (14161)	3/25/2000 10:48:00 AM
From: Techplayer	Read Replies (1) of 21876

Prabhu, You did not get the gist of GVTucker's post. What I got from his insight is that CSCO is achieving it's EPS in part from the right-off of acquired R&D. If CSCO (or LU, NT, etc) was forced to include the total cost of all acquisitions as part of R&D, reported earnings would be significantly different. As has been discussed on numerous threads, the SEC is trying to do away with this practice. In my opinion, this will hurt the bottom line for those doing the acquiring. Acquired R&D at the extremely high valuations being assigned start-ups will negatively effect reported EPS. As a result, there may be a reduced number of acquisitions or prices paid if these new rules are in fact adopted. Of course, those working inside of the new start-ups with a keen eye on being acquired, do not want these rules enforced either.... As a result, GVTucker's information and opinion has merit since LU relies less on acquisitions and would be less effected in the event of the change in accounting practices. (I am not an accountant, so this is all in my opinion). tp

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