Advanced Micro Devices - Moderated (AMD) Message Board

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Technology Stocks : Advanced Micro Devices - Moderated (AMD)

AMD 203.14

-0.8%

Jan 9 3:59 PM EST

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To: niceguy767 who wrote (77310)	4/16/2002 10:00:09 PM
From: ptanner	Read Replies (2) of 275872

niceguy, re: "Just how much of that $4.388 billion in goodwill do you think is impaired?" Maybe I am missing something. Say Intel decides to just write the whole bundle off tomorrow. What is different about the company or its future potential? The goodwill was bought (with cash or stock) and is not something which has any potential. ("Hi, want to buy some goodwill? Good stuff, telecom and networking!") "Earnings" would take a hit. And the balance sheet would be different. But the fabs, IP, products, customer relationships and cash in the bank are all unchanged. When the telecoms took massive writeoffs the stocks didn't plummet - they already had. The market had already recognized that the companies were no longer worth high P/E or P/S ratios due to changes in their future growth. The write downs merely reflected this change and are now the normal course of business. Does a stock investor really consider goodwill to be an asset with value? Sure, it can be used for tax benefits (?) through amortization or write offs. While goodwill may reflect paying too much for a company this transaction is already complete. What am I missing? This subject is getting a little old - particularly on the AMD thread. -PT

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