Advanced Micro Devices - Moderated (AMD) 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 : Advanced Micro Devices - Moderated (AMD)

AMD 203.14

-0.8%

Jan 9 9:30 AM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Dan3 who wrote (77339)	4/17/2002 2:05:27 AM
From: ptanner	Read Replies (2) of 275872

re: "Not this quarter." The $1.27B I noted was as follows (reverse chronological order): $0 + $406 + $450 + $417 = $1,273. re: "They've adopted the Ostrich approach to dealing with past acquisition mistakes." I think you are being over-critical here. Let's use Alchemy as the example since I can't recall any of Intel's acquisitions and the acquisition also had negligible tangible (book) value - it was mostly IP. Assume Alchemy works out well and becomes a solid contributor to the company's revenue "forever" by contributing to the evolving body of IP to enable new products. The investment could be like a savings account with continual payouts with no loss of principal; alternatively, it could turn out to be a 100% loss overnight. (a) Under the old rules AMD would have been required to writedown the $50M cost against earnings over X years. Why should AMD reduce its earnings for an asset which may not have a finite life. (b) With the new rules... AMD would have to post a charge to earnings as this investment as it became impaired. If Alchemy is a complete flop the charge is immediate and obvious rather than dwindling away over decades (30 years?). If Alchemy simply works out well there is no apparent cost reflected in the earnings. Isn't the new system more responsive to the impact of goodwill assets? The new system has required some massive write downs but also allows others to avoid a drain on earnings that may not be relevant. -PT

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next