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Technology Stocks : Energy Conversion Devices

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To: WALT REISCH who wrote (2575)11/5/1998 4:32:00 PM
From: Joe Master  Read Replies (1) of 8393
 
Walt dont mean to burst your bubble but two points you made show that you are not an accountant (not necessarily a bad thing). First is that if someone buys stock from you that is an addition to the balance sheet in the equity section. it will not impact the income statement except for the fact that earnings will be diluted. Also why would they pay more than the market value becaue it is "undervalued" (in your mind maybe, to the market it is correctly valued) when he could go to the amrket and just buy the shares for market value.

Next ECD takes prepaid royalties and puts them on the balance and records them as income as the royalties are worked off against sales. There certainly could be some income component of what is being paid but it looks to be deferred in most cases to some later periods.
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