Novell (NOVL) dirt cheap, good buy? Message Board

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Technology Stocks : Novell (NOVL) dirt cheap, good buy?

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To: Dennis Conner who wrote (6118)	12/22/1996 8:28:00 PM
From: E_K_S	of 42771

Hi Dennis - I suggest everybody read this week's Barrons article which describes how IBM accounted for (to their benefit) the Lotus transaction. According to the article, the purchase "inflated" future earnings significantly due to the way the accountants booked GoodWill. The article describes how certain "High Technology Software & Hardware" companies when acquired (not as a pooling of interests) can have their technology accounted for as "Purchased Technology" rather than amoritized over 40 years as 'Goodwill'. What does this mean? A large company such as an Intel could pay a huge preminum for Novell and use this 'creative' accounting entry for "Purchased Technology" and not impact future earnings as a straight line deduction of 'goodwill' would. Therefore it makes it a bit eaisier to swallow an acquasition. More food for thought. EKS Merry Christmas and a most profitable New Year to all (including Novell shareholders)

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